$$ for your kids

[niq]

May 14, 2014 16:34:32 GMT -5 kershnic said:

May 14, 2014 12:12:57 GMT -5 niq said:

It's an investment. Well, everywhere but WA state, where you can only prepay tuition (which is fine by me!)

You probably get a deduction on your state income taxes, but only if you use your state's 529 plan. The best plans are low-fee index funds that automatically move from higher risk/high return assets (stocks, mostly) to lower risk/lower return assets (bonds, mostly) as the kid gets older.

Clark Howard has a very easy to read and helpful guide

www.clarkhoward.com/news/clark-howard/education/clarks-529-guide/nFZS/

If you stick to your home state's 529 plan for the tax deduction, look very closely at the expense ratios on your available funds.

we need to get on the stick about our college savings thing, and soon, arrrgh.

Am I correct in understanding that the tax deduction is for tax payers of the state rather than residents?

This might vary by the state(s) in which you pay state income tax. I would check with a tax accountant in your state(s).

(my home state has no state income tax and only has prepaid tuition instead of a savings plan. V's grandfather lives in GA which has a highly rated plan, so he just stuck with his in-state plan to keep it simple).

[docholly]

May 14, 2014 12:25:22 GMT -5 @peggyolson said:

She has a piggy bank in her room where I put all of the cash she receives as gifts. At some point, I will take it to the bank and deposit it in our account so I can then transfer it to her 529.

This is where we are.  I think ODS (3) has a couple hundred dollars in his piggy bank.

[kershnic]

May 14, 2014 16:59:16 GMT -5 niq said:

May 14, 2014 16:34:32 GMT -5 kershnic said:

Am I correct in understanding that the tax deduction is for tax payers of the state rather than residents?

This might vary by the state(s) in which you pay state income tax. I would check with a tax accountant in your state(s).

(my home state has no state income tax and only has prepaid tuition instead of a savings plan. V's grandfather lives in GA which has a highly rated plan, so he just stuck with his in-state plan to keep it simple).

I feel like we have just enough money to be thinking about this stuff, but too little money to be thinking too seriously about it (like hiring an accountant).    

I realized though that even if we had a tax deduction in our non-resident tax state it would just increase the amount we owe to our resident state...so I guess the point is moot.  

[jinxy]

We have a 529 for DS that we contribute to monthly and the grandparents add to for special occasions. We also opened up a custodial savings account at our credit union where we deposit money he gets as gifts.