529 college savings plans....

IamMom · #1 January 5th, 2010, 07:04 AM

Do you have them started for your kids...or future kids? Do you plan to invest in one someday?

We have one that we've invested in for each of our kids. However, my dad put a large sum of money into ones he started for each of our kids (excluding Brayden) when they were born. I feel pretty good that we have college covered

My financial planner said to look at it like this...whatever the cost of 4 years of college is today - if you have that in an account today your covered - college costs and the return on these investments are likely to raise at comparable rates.

We actually had a pretty nice sum built up in a plan before Harrison was born and I used it to help with my masters. It was nice!

~*sierra*~ · #2 January 5th, 2010, 07:36 AM

i imagine we will open some sort of school account for our future offspring... ugh i am pretty sure at this point by the time our kids graduate university i will probably be graduating at the same time ARGH!

sara~b · #3 January 5th, 2010, 08:12 AM

I had just a regular savings set up for Gemma but it didn't have much in it. Being laid off has really hurt me financially so I used what was in there to keep us afloat. I know exactlyhow much I 'owe' her though so I will put it back as soon as I can go back to work.

Frozendesire · #4 January 5th, 2010, 08:43 AM

We have some savings set up for the boys. It's not an education fund though. We wanted to be able to have access to it at any time. James is dyslexic and needed/could have used alot of extra help in his elementary and highschool years. We don't want to not have the funds available if they need tutors or anything like that.

IamMom · #5 January 5th, 2010, 09:30 AM

You guys do know that you can pull the funds out for other stuff....you would just have to pay tax on the earnings/gains...not on the principle put in.....just a thought! Also, many states offer a tax deduction if you invest in that states plan...we are invested in VA plans so we got a nice deduction when we filed there...NC plan sucks so we've left it in the VA plan.

#6 January 5th, 2010, 09:34 AM

We are starting one this year! It is on our big list of grown up things to do in January

I just need to figure out where to go/where to start to do that. Suggestions Keri?

Chelnae6 · #7 January 5th, 2010, 09:34 AM

I plan on getting one for Lani when she's born.

IamMom · #8 January 5th, 2010, 09:44 AM

Quote:

Originally Posted by MomToJack

We are starting one this year! It is on our big list of grown up things to do in January

I just need to figure out where to go/where to start to do that. Suggestions Keri?

AWWW you are such a grown up girl JK

! But honestly it is a really great thing to do for your kids Michelle! I would start by googling your state and then 529 plan....and see what their plan is like (if its allowed to be invested by a finacial planner/broker that's better - if its a state run thing like NC they usually suck....). The website should give you all the info you need (usually they have a "getting started" area). If you know anyone who does financial planning I would call them and see if they can help you get it all set up...but I think you could do it all on your own directly with the plan itself (they usually have a broker/firm that will help individual with the broker invested program). Most have a pretty low minimum investment!

What's cool is anyone can put money into it once you have it set up....so you can "ask" for investments to it for Christmas/birthday gifts if you wanna....but whoever puts the money in gets the tax deduction for the state I believe.

#9 January 5th, 2010, 09:48 AM

Thanks for the info Keri, i will go google that right now. I have another question! I also plan on putting Jack into private school starting at pre-school (because I am a snob like that! Actually, b/c AZ sucks in the education dept). My parents want to contribute some towards that. Do you think just a savings account would suffice since the money has to be pulled out annually?

IamMom · #10 January 5th, 2010, 09:56 AM

Quote:

Originally Posted by MomToJack

Thanks for the info Keri, i will go google that right now. I have another question! I also plan on putting Jack into private school starting at pre-school (because I am a snob like that! Actually, b/c AZ sucks in the education dept). My parents want to contribute some towards that. Do you think just a savings account would suffice since the money has to be pulled out annually?

I'm a snob too....

Harrison and Nora are going to a private or charter school as well (our local public schools are scary!). Since yes you'll be paying that annually I would put it into a normal savings account....or something very safe like a money market or a CD....nothing with any kind of aggressive risk. Since your time horizon will be short as to when you need the money safer is better - and the point isn't really to earn a super large return its just to earn a bit while you wait to pay the tuition each year. Awesome for your parents wanting to help with that! (Have them start investing now!!!! Preschool will be here before you know it...Harrison will be in kindergarten in less than a year and a half

)

#11 January 5th, 2010, 10:22 AM

I know, I don't want to think about him growing up b/c all I do is cry

I want him to stay with me forevah!!!

soImarriedAnerd · #12 January 5th, 2010, 09:52 PM

London had two LOL (CO and IL) Also FYI--FIRST best thing to do is see if your state gives right offs for it---if the do go with that one. If not you don't have to use your own state. Check fees because there is a big difference!

JediRach · #13 January 5th, 2010, 10:08 PM

I want to start a fund for our kids as soon as the first one is here. The schools in San Diego suck.

Angelaosaurus-rex · #14 January 6th, 2010, 07:48 AM

9-11 GI bill yo!

Resi · #15 January 6th, 2010, 08:49 AM

Checking into our state right now. This is something I have been wanting to do. Thanks for the post. It's given me the kick in the butt I need!

IamMom · #16 January 6th, 2010, 12:05 PM

Quote:

Originally Posted by Resi

Checking into our state right now. This is something I have been wanting to do. Thanks for the post. It's given me the kick in the butt I need!

AWW I'm so glad this helped to get your moving on it Resi...its just such a smart thing to do. I'm a huge advocate of 529 plans!

I agree with Angela the tax deduction for state purposes is worth it unless your states plan sucks major monkey balls like mine....I definintely researched this and leaving my money in the VA was way worth the "deduction" I would get in NC. Some states don't allow the account/funds to be managed by a financial advisor/broker and some have very limited investment options (that stink). There is also usually a cap on the amount you can deduct (even if you put in more than that in a year) so its not always as great as it seems.

Here is a website where you can compare plans by state and features:
CSPN - Plan Comparison By State

~*Bethy*~ · #17 January 6th, 2010, 01:41 PM

How much a month are you spending/putting away in the account? Can both kids use 1 account? or would it be better to do 2 accounts with like $20 a week per kid? or even $50 a month per kid? Were not putting the kids in private school (I would LOVE to) but thats just not an option - so ours would be for collage for the kids. Can you give me more pointers and info (the site has me confused cuz I dont know what Im doing LOL!!)

IamMom · #18 January 6th, 2010, 05:21 PM

I'll PM you beth with pointers about your state specifically!

These 529 plans are specifically for HIGHER education costs ....not private school...we just went on a little tangent there about saving for private school when they are in elementary, middle and high school and currently there is no "tax beneficial" savings vehicle for that.

soImarriedAnerd · #19 January 6th, 2010, 08:09 PM

I don't put one penny in ! LOL The only money in so far is money he has gotten as gifts and the money that we earn via Upromise (free and wonderful!). Upromise I have earned over $500 so far!!!!!!!