MOOKs: 529s?

[notsopicky]

Internet stranger friends, I need your guidance on 529s--how to find one, how to set it up. I am sitting on a good amount of $ for my son for school (gp gifts + an inheritance), and I just don't even know where to start.



I've tried to research it, but I'm at the point where I don't know what I don't know, so I'm just spinning my wheels. Plus, it's a good chunk of $, so I think I'm wary of just "sending it off someplace", if that makes any sense. I can go to a location (financial adviser, bank) to set it up, but where do I go? 

Thanks in advance for any advice you can send my way. 

[mainelyfoolish]

You can open a 529 plan in any state but some states offer benefits to their residents for using their own state’s plan, so check out your own state first; a tax deduction or matching grant may more than offset a higher fee management company or different investment options than what you can get in another state.

Some states offer funds for DIY 529 investors that are lower fee than the 529 funds sold by financial advisers, so you could save money if you can tolerate setting everything up yourself.

Since you don’t seem keen to actively manage your investments, I suggest choosing an age-based fund if you have that option. It’s similar to the target date retirement funds in that the investments are more heavily weighted to stocks for younger kids and the portfolio rebalances to be more conservative as the child gets closer to college age.

The website savingforcollege.com has a lot of good information.

[mlkgls]

I did a fair amount of research before setting up DS’s 529 and ended up choosing a Utah my529 account. It consistently showed up on “”Best 529” lists and setup could not have been easier. There was no tax benefit to using my state plan which factored into my decision.

There are several different plans as far as conservative vs aggressive investing, but is age-based otherwise. It is very much set it and forget it, which is what I was looking for in a plan. I can send money directly from my bank account and can provide a gift link to grandparents without granting them access.

[farmvillelover]

Sept 15, 2019 9:08:54 GMT -5 mlkgls said:

I did a fair amount of research before setting up DS’s 529 and ended up choosing a Utah my529 account. It consistently showed up on “”Best 529” lists and setup could not have been easier. There was no tax benefit to using my state plan which factored into my decision.

This is what I did exactly.  Aside from my own research, our financial advisor at the time used the Utah plan for his own 3 kids and recommended we do the same so that validated my choice. I have my kids in the age based plans, one is Global Aggressive and the other is Domestic Aggressive I believe.  

[notsopicky]

Thanks, everyone. This task seems SO DAUNTING and I really don't know why. I'll keep at it.

[turtletop90]

We went through Vanguard because we already had investment accounts with them. I kept putting it off too, but it was surprisingly easy.

[gt7301b]

This is a good guide:

clark.com/education/clarks-529-plan-guide/

[tcu2003]

We ended up using the NY plan. Like Utah, it was one of the ones that showed up often on best/most recommended lists, and my state grants you tax benefits for 529 contributions regardless of which state plan you choose, so we didn’t choose our state’s plan as it isn’t the best.

[sandandsea]

We did a CA 529 because it was easy since it’s our home state. We don’t get any tax benefit but wanted something I could manage online and let it sit and forget. I think jumping in is intimidating but once we jumped it’s been really easy and I feel more comfortable putting more in. We did the same for DS2 as well once he was born (4.5 years younger than ds1).

[lessel]

This might be a dumb question, but would a 529 always be the best scenario for this? How old is the kid? Could there be other options to explore if there's already a sizable sum of money to invest?

[Cappy]

Sept 16, 2019 6:43:20 GMT -5 lessel said:

This might be a dumb question, but would a 529 always be the best scenario for this? How old is the kid? Could there be other options to explore if there's already a sizable sum of money to invest?

I wonder this too. Especially since I work at a university and routinely come across people having trouble getting the money out or dealing with the fact that spring bills come in December, Due January 1st (and I seem to remember some issue with timing regarding this). I know there is a tax advantage but I'm still wary of if the risk of tying the funds up with rules is worth the payoff. 

[steamboat185]

Sept 16, 2019 6:43:20 GMT -5 lessel said:

This might be a dumb question, but would a 529 always be the best scenario for this? How old is the kid? Could there be other options to explore if there's already a sizable sum of money to invest?

We’ve stopped using a 529 for our 6 year old and plan on stopping for our younger one once we hit the same amount invested. Our state gives a income tax exemption too, but we have decided it makes more sense to have the bulk of money in a regular investment account for each kid as we just aren’t sure what college will look like in 12-15 years.

[liveintheville]

We didn’t get a tax break in our state so we went with Utah as well. We did research of our own and talked to our financial planner about it. It seemed like the best bet.

[Susie]

I opened 529s for both of my kids with NY's college savings program, because I'm an in-state resident and get a state income tax deduction for contributions, and it was well rated.  I use age based investments and my desired risk level, it's pretty easy.

[whitemerlot]

No tax break for using our states plan so we are using Utah age based global aggressive for both of our kids. We are happy.

[heyjude]

If you are a Ca resident and contribute to a 529 plan out of state, there is a bill currently pending that would allow a personal income tax deduction on contributions to the in-state 529 program. The bill is not final. Just something you might want to keep on your radar though.

[niq]

Sept 16, 2019 6:43:20 GMT -5 lessel said:

This might be a dumb question, but would a 529 always be the best scenario for this? How old is the kid? Could there be other options to explore if there's already a sizable sum of money to invest?

WA has a pre-paid tuition option, which we're using (if your kid goes to a private college or out of state, your pre-paid tuition is worth whatever the highest). You're only allowed to put 6 years worth of tuition, which works out to slightly less than 4 years of total cost of attendance. That seems like a good cutoff; if the kids end up going to private college, the rest of college money will come from general taxable investments.

[carmenere]

My H did some research for SIL's kids and settled on NY's 529, but I don't know why that one specifically. We are out of state and not concerned with tax benefits - just wanted to be able to give monetary gifts into a 529.