Do you have a 529 plan for your kid(s)?

[miso]

I thought it would be a no-brainer to do one for my kid because I automatically expect her to go to college (as does my whole extended family, no pressure or anything).

But, after a lengthy discussion with my co-worker, I'm re-thinking it.

What if the kid doesn't go to college? Does something else? What happens to all that money?

My co-worker thinks we should just save generally and not put the money in a 529.

Do you have a 529 plan for your kid(s)? Why or why not?

[speckledfrog]

Yes. It will be part of their college savings but not the bulk of it.

[miso]

Oct 5, 2015 12:00:30 GMT -5 farmvillelover said:

Yes I have a 529. IF the kids go to college and use the 529 funds, the growth of the funds put in is tax-free. That’s enough of a benefit to me to do a 529 vs just save in a taxable investment account and later use the funds to pay for their schooling. Esp beneficial if you’re in a pretty high tax bracket, which you are.

If kid doesnt go to college you can transfer it to another child or any other person (so if your bro has kids). If that's not an option, then you just take the funds and pay income taxes and a penalty (I think it's 10%? I don't remember).

It's really a no-brainer, right?

I don't know why I'm letting my co-worker influence me so much.

I'm already behind on giving. Kid will be two in January! Poor kid. LOL.

But this is my co-worker who is SO SMART and SO FINANCIALLY SAVVY. I really trust her. But I think she is wrong about this, at least for me. The odds of my kid not going to college are probably slim. That's just what I think.

[miso]

Also the thought of my giving my brother money made me laugh out loud.

Heartily.

[eddy]

Yes

I worked in FA and saw how important saving for college was.

[pagas]

We do not. We will cash flow college, which we will be used to since she is in private school.

[smock]

Yep, we have a 529 through Utah since our state doesn't give any incentives for opening one in-state.

[fluffernutter]

We have a 529 plan and a whole life insurance policy that can be liquidated whenever.

[spwspw]

Oct 5, 2015 12:00:30 GMT -5 farmvillelover said:

Yes I have a 529. IF the kids go to college and use the 529 funds, the growth of the funds put in is tax-free. That’s enough of a benefit to me to do a 529 vs just save in a taxable investment account and later use the funds to pay for their schooling. Esp beneficial if you’re in a pretty high tax bracket, which you are.

If kid doesnt go to college you can transfer it to another child or any other person (so if your bro has kids). If that's not an option, then you just take the funds and pay income taxes and a penalty (I think it's 10%? I don't remember).

Yes for both kids, for all the above reasons.

[lauralala]

We do have a 529. Like you, I assume my child will go to college. If he doesn't for some reason, we'll deal with the penalty for pulling the money out. I would rather have it there as a tax-free (growth) option.

[sugarbear]

Yes, for both kids.
I would really like them to attempt some sort of post-HS training. It will pay for a vocational program, too. And if they really don't want to go to college, then I'll take the money back and pay the penalty.

[miso]

Oct 5, 2015 12:17:25 GMT -5 Les Paul said:

You can get the money back if she doesn't go to college.

I expect my children to pay for their own college. I paid for mine; there is no silver spoon or golden ticket here. DH paid for 1000% of his childrens' college, including all associated expenses so that little preshuses wouldn't have to work at all, and it has not turned out well.

I applaud your strong stance and philosophy re paying for college yourself.

But there is no need to be so dismissive of those who wish to pay for their children's education.

[cereal K]

yes, for both. we started earlier with G, though, so his will be slightly better funded. sorry, C.

that said, given what my financial person is projecting for the cost of 4 years in college by the time they get there, we'll really only be able to fund about half of the tuition. they'll have to come up with scholarships or other aid for the rest of it.

[Bernadine]

Oct 5, 2015 12:37:19 GMT -5 miso said:

Oct 5, 2015 12:17:25 GMT -5 Les Paul said:

You can get the money back if she doesn't go to college.

I expect my children to pay for their own college. I paid for mine; there is no silver spoon or golden ticket here. DH paid for 1000% of his childrens' college, including all associated expenses so that little preshuses wouldn't have to work at all, and it has not turned out well.

I applaud your strong stance and philosophy re paying for college yourself.

But there is no need to be so dismissive of those who wish to pay for their children's education.

I couldn't find a way to say this, but this is good.

I think my parents did it perfectly- they paid for college, because it was that important to them that we go, but we had to pay for books, cars, gas, spending money, etc. So, some responsibility, but not total.

And yes, I plan on opening a 529.

[eclaires]

We have a 529 that will be shared between both kids, but generally, our savings for college is separate. The reason we have a 529 is that when Jackson was born, we lived in Indiana, and Indiana's 529 has a state tax benefit. Our whole family lives in Indiana basically, so not only could we take advantage of that when we put money in it, but so could they. About 6 years ago, we moved to TN, so we tapered off our contributions. Our family, however, continues to put money it because they still get the tax benefit. It's nothing that great (the benefit) but it's something.

I don't think it's a bad idea to have a 529, but we don't plan on using ours for the bulk of the kids' college savings.

ETA: we also plan to fully fund their college education, and help out however we can with anything beyond a 4 year degree.  But, both MH and I had parents who funded our college education (my parents paid for tuition/room/board, but I had to have my own spending money and pay for my car/gas - MH was given a little more by way of spending money, but he also had lower expenses than I did since his mom still bought all his clothes, lol).  We both feel we owe it to our kids if we can afford it (we can and expect that to continue), and we both feel like 4 years away at college is a good bridge to adulthood with a financial safety net.  I think you can still have expectations; I know my parents required I maintain a certain GPA or I was on my own.  My husband basically had a 4.0 in a difficult major, along with well paying internships in the summer, so I think his parents felt like their investment was well earned.  We kind of have the philosophy that we want to give them the best start in life we can, but if they are fucking around, we're not funding it.  I think more dangerous than just funding college, is funding college without any expectation.  My kids are screwed anyway because both my husband and I were good students, and we have thoughts about how difficult college is (ha) and have very high expectations, esp if we are footing the bill.

[revolution]

Yes. We just set them up for the kids this year - they are 3 and 7. I want them to get some sort of post-HS education and this route seemed to make the most sense.

[thebuddhagouda]

We have whole life plans on both kids that will have built enough cash value for withdrawal by the time they start college. We figure that can be used for college or can just be kept in if they get scholarships or don't attend. That way, they can use toward a house or wedding or something else.

We didn't want something that had to be used for college or be penalized. 

[thebreakfastclub]

Oct 5, 2015 12:37:19 GMT -5 miso said:

Oct 5, 2015 12:17:25 GMT -5 Les Paul said:

You can get the money back if she doesn't go to college.

I expect my children to pay for their own college. I paid for mine; there is no silver spoon or golden ticket here. DH paid for 1000% of his childrens' college, including all associated expenses so that little preshuses wouldn't have to work at all, and it has not turned out well.

I applaud your strong stance and philosophy re paying for college yourself.

But there is no need to be so dismissive of those who wish to pay for their children's education.

In addition, higher education costs have more than doubled in the past 20 years, adjusted to today's dollars. It's not really fair to compare what we could do then vs now.

[eddy]

My parents paid for my college and I am not an asshole. I bristle at the idea that providing education means you are creating entitled children.

[daisybuchannan]

We do have 529 plans for each kid.

Our plan is to contribute to the 529, pay for what we can at the time, and hope that our kids get some scholarship money (I mean, what parent doesn't? Lol).

My parents paid for my brother and I in cash (2 very expensive private universities) and could afford it at the time. My dad's business slowed WAY down, and now they really could use the hundreds of thousands that they spent on college. And the truth is, my brother and I could afford student loans if we needed them. The whole situation has made me realize that if my kids need to take some loans, it's not the end of the world. My biggest takeaway is to make it an ongoing conversation while our kids are in high school and applying for colleges. My in laws gave my H zero guidance and he had (has) terrible high interest loans. My parents never even discussed the different tuitions with me when we were looking at schools.

[daisybuchannan]

Oct 5, 2015 12:47:22 GMT -5 eddy said:

My parents paid for my college and I am not an asshole. I bristle at the idea that providing education means you are creating entitled children.

Agreed. 

I'm not entitled, I just wish my parents had some of that money now in their retirement. 

[miso]

Oct 5, 2015 12:47:22 GMT -5 eddy said:

My parents paid for my college and I am not an asshole. I bristle at the idea that providing education means you are creating entitled children.

To be fair, I am kind of an asshole.

But this asshole also has no student loans, which affords her the ability to pay it forward to her kid.

Sorry that the asshole cycle will continue. LOL.

[eddy]

Oct 5, 2015 12:48:58 GMT -5 miso said:

Oct 5, 2015 12:47:22 GMT -5 eddy said:

My parents paid for my college and I am not an asshole. I bristle at the idea that providing education means you are creating entitled children.

To be fair, I am kind of an asshole.

But this asshole also has no student loans, which affords her the ability to pay it forward to her kid.

Sorry that the asshole cycle will continue. LOL.

Exactly

Once my parents surprised me on graduation day by paying my loans in full I knew trying to do the same for my kids would be a goal of mine.

[pagas]

Oct 5, 2015 12:48:58 GMT -5 miso said:

Oct 5, 2015 12:47:22 GMT -5 eddy said:

My parents paid for my college and I am not an asshole. I bristle at the idea that providing education means you are creating entitled children.

To be fair, I am kind of an asshole.

But this asshole also has no student loans, which affords her the ability to pay it forward to her kid.

Sorry that the asshole cycle will continue. LOL.

DH is way more of an asshole than I am and he had to pay for college and grad school himself.

Mine was free (thanks state of Texas taxpayers) and it did not influence my asshole-ness. 

DH and I have major disagreements when it comes to college funding.  

[Deleted]

We do because we have three kids and I figure the odds are in our favor that at least one or two will want to use the money for educational purposes. You can change the beneficiary with no penalty (and I believe it can even be changed to a grandchild). It can also be used for grad school. If that still doesn't fix the problem, you can release the money by paying a 10% penalty.

[miso]

I don't actually think I am an asshole.

Well, not in relation to having had my education fully funded, at least.

Any asshole tendencies are wholly independent from that.

[pbandj]

We have a 529, but it will not cover all of college costs. It was started with grandparent gifts.
You can still use it for non-traditional schools, right? If she is interested in art school, or community college?

[beefcheeks]

Oct 5, 2015 12:17:25 GMT -5 Les Paul said:

You can get the money back if she doesn't go to college.

I expect my children to pay for their own college. I paid for mine; there is no silver spoon or golden ticket here. DH paid for 1000% of his childrens' college, including all associated expenses so that little preshuses wouldn't have to work at all, and it has not turned out well.

Ew.

[cookies]

I'm almost 38 and just paid off my student loan last month. Even if it makes my kids assholes, I'd love to pay for my kids' college educations. I'd love if we could save as it would cost for them to attend our big state school. If they want to go private, they'd best be smart and get scholarships.

We opened 529 plans with our state since we get a state tax discount for contributing. We don't contribute a lot now because we have a few other financial priorities that take precedent. I hope we can contribute significantly more by the end of 2016 - and certainly when we're finished paying out the nose for daycare.

[beefcheeks]

Oct 5, 2015 12:54:12 GMT -5 @kirkette said:

We have one for Leila , but we don't really contribute to it anymore because it's not needed.
ILs will be paying for higher education. So, they have them for both our girls, and all the other grandchildren.

Sorry your kids will be entitled jerks!