WAY OT: Anyone have any thoughts on 529 College Plans??

[Machiavelli23]

My brother has a 7 month old and was wondering on how to save for college and heard about 529 plans.

He lives in NJ and heard that if he sets one up and his kid goes to a NJ college, an extra $1,500 goes to the child for school.

Does that outweigh some of the other 529 plans that other states had. I read that New York, Utah, Virginia, and Maryland have 529 plans that have pretty good 10-year returns.

Any thoughts about 529s??

 

[gringo]

http://www.savingforcollege.com

 

[Myrtleknight]

There is a thread on 529 plans every other month. It amazes me that I have seen at least a half dozen of these and I can't remember ever seeing a thread on mutual funds, advisors, planners, wealth management firms, rias, etc...the psychology is fascinating. People don't mind discussing things like buying cars or saving for college because they are assumed costs everyone or everyone with kids has to endure. But talk about your personal finances and investments, forget it.

 

[RUtix4me]

There is a thread on 529 plans every other month. It amazes me that I have seen at least a half dozen of these and I can't remember ever seeing a thread on mutual funds, advisors, planners, wealth management firms, rias, etc...the psychology is fascinating. People don't mind discussing things like buying cars or saving for college because they are assumed costs everyone or everyone with kids has to endure. But talk about your personal finances and investments, forget it.

So start one up on retirement savings (which i think I have seen here☑️), credit cards ☑️, colonoscopy & taxes ☑️( sort of the same category), ETFs, stocks, oil related investments, gold✅☑️☑️☑️, lawyers ☑️. There has clearly been discussions on defined benefit plans vs defined contribution plans but any way.

Finishing up my third kid all went private....we benefitted by having kids in the 90's. Do The math on the PV of 18-21 yr zero coupon bonds in a 9-10% interest rate environment. A broker where I worked showed me that you could buy FICO bailout zeros at 8-12 cents on the dollar. We loaded up early covering the then cost of school. Used 529's to cover the inflation rate of school costs with annual deposts, flattened in Q2 of 2007 based on what i saw coming....my number 1 advice skip the luxury cars and start saving on day 1. The return on not pissing money away on cars beats any difference in 529 plans or approaches.

 

[RBS05]

There is a thread on 529 plans every other month. It amazes me that I have seen at least a half dozen of these and I can't remember ever seeing a thread on mutual funds, advisors, planners, wealth management firms, rias, etc...the psychology is fascinating. People don't mind discussing things like buying cars or saving for college because they are assumed costs everyone or everyone with kids has to endure. But talk about your personal finances and investments, forget it.

You haven't been looking closely enough. Just the colonoscopy guy starts a basic investment one every few months...

 

[patk89]

The earlier you start, the longer it compounds. NY has a strong plan and I can deduct $10,000/year from my state return (doesn't apply to NJ residents). Some of my colleagues live in NJ and still use the NY plan. Vanguard funds.

 

[mikebal9]

I opened a Roth IRA for my son instead of a 529. It has lower limits, but I won't approach those anyway. The positive is that it's less restrictive so if he decides not to go to college, we're still good.

 

[Machiavelli23]

The earlier you start, the longer it compounds. NY has a strong plan and I can deduct $10,000/year from my state return (doesn't apply to NJ residents). Some of my colleagues live in NJ and still use the NY plan. Vanguard funds.

Nice. THAT is good to know. I wish in NJ you can deduct. I heard that some states you can deduct even if you don't have a 529 from your state. Really wish NJ had THAT!

 

[bethlehemfan]

Worked out well for us here in pa.

 

[tychicus]

I opened a Roth IRA for my son instead of a 529. It has lower limits, but I won't approach those anyway. The positive is that it's less restrictive so if he decides not to go to college, we're still good.

how do you open up a roth ira for your son if he doesn't have earning income?

 

[gmay8]

I'm in the middle of this right now myself... I'm going to start contributing to a 529 for my daughter. I'm thinking using Merrill Lynch as I have some other stuff with them. I'm trying to do research and still find the entire process confusing... state plans, and deductions and all that.

 

[Scarlet Pride]

how do you open up a roth ira for your son if he doesn't have earning income?

I would assume he didn't establish it in his son's name but rather his own. He can then use that money to pay for college tuition bills but if his son doesn't go to college he can use it for whatever he wants.

 

[mikebal9]

I would assume he didn't establish it in his son's name but rather his own. He can then use that money to pay for college tuition bills but if his son doesn't go to college he can use it for whatever he wants.

Exactly. I feel like if things keep going the way they are, college may be too expensive to be worth it in 18 years. So if he decides to take up a trade or go right to the majors as a lefty starting pitcher, we can use the money for other things.

 

[Machiavelli23]

Interesting info so far from everyone

 

[Vejai]

I'm in the middle of this right now myself... I'm going to start contributing to a 529 for my daughter. I'm thinking using Merrill Lynch as I have some other stuff with them. I'm trying to do research and still find the entire process confusing... state plans, and deductions and all that.

If you live in NJ, you don't have to worry about deductions as you don't get any. There seems to pretty much be a concensus that if you don't get any benefits with your home state plan, there are 4 or 5 other state plans that are the best to pick. Can't remember the top ones but know nydirect is one of them so if it's too confusing and you don't get a state benefit you might just want to look into that one.

 

[RUBlackout]

I live in NJ and have a NY 529 that is tax deductible..was my best bet when starting this two years ago. I will not try and put eveything into it though for college and rather invest some money instead outside there if they decide not to go like other said.

 

[kjb32812]

Some things to consider;

• Control vs. tax benefits
• How old are the parents
• How many kids do you have/plan on having
• Impact on student aid/EFC/FASFA

 

[Saint Puppy]

I live in NJ too, and also used the NY 529 because it was tax deductible. Put in a large lump sum a few years ago, and now making minor but steady contributions to it monthly. This is not going to pay off his college (especially at the rate things are going), but it will be a nice head start. Need to look out for my retirement which is where a large % of savings are going - love my kid, but not going crazy with saving for his college - paying yourself first is some great advice I've heard several times over.

 

[Blitz8RUCrazy]

move to TX

 

[e5fdny]

I live in NJ too, and also used the NY 529 because it was tax deductible. Put in a large lump sum a few years ago, and now making minor but steady contributions to it monthly. This is not going to pay off his college (especially at the rate things are going), but it will be a nice head start. Need to look out for my retirement which is where a large % of savings are going - love my kid, but not going crazy with saving for his college - paying yourself first is some great advice I've heard several times over.

"No scholarships for retirement."

 

[Vejai]

How are you guys deducting ny529s if you live in nj? Do you work in NY?

 

[Saint Puppy]

How are you guys deducting ny529s if you live in nj? Do you work in NY?

Yes