Forgive me MMM for I have sinned. We do not have a college savings account set up for the kids. We have do have a little $ saved for college but it’s in an account at Schwab. Now my mom has left them some that she wanted used for college I would like to get an actual college savings account set up.
Post by goldengirlz on Apr 15, 2021 22:33:32 GMT -5
My office had a financial advisor come in to do a presentation on various college savings options (don’t ask) and my takeaway was that, yes, a 529 makes the most sense for us.
I guess some people also save in an IRA because it can be used for retirement expenses if there’s leftover money. But I’m pretty sure that it would be impossible for us to over-save, especially given how college costs are trending.
Certain states also give tax deductions for 529 contributions so that might tip the balance.
We have a Utah based 529 plan. It’s doing great, we are on track to have about 80% of the projected costs in there by the time dd starts college. There were a few other options specific to Texas even I opened it but there wasn’t much benefit to them for the restrictions they gave.
We only opened a 529 last summer and don't put much in it, except we do get a state tax break up to a certain amount each year.
I would look if you get any state tax breaks and/or what state's may perform better.
FWIW, you don't have to do a 529. I think they're a good a idea, but they're not one size fits all. I think sometimes it's become the norm thing to do. So just putting that out there.
DD is 7 and I have nothing formal setup either besides some money earmarked for her that is sitting in a savings account. DS has nothing.
I am formally meeting with a financial advisor soon. Because I am self employed, DD is on my payroll and I am planning to set up a Roth IRA for her. The advisor mentioned something about keeping her employed through the business when she is in college to help pay for school that way. He said a 529 may not be the best solution for us especially since our state gives no breaks for having one.
If you do a 529 and your state has a tax benefit, know that the benefit is usually capped -- like up to $x per year. So from a financial standpoint, in that case, you'd be better off financially if you contributed the amount over several years. BUT - there's a lot to be said for just having it done, and it's okay to not drag it out.
Post by pinkdutchtulips on Apr 16, 2021 13:08:38 GMT -5
i havent begun to save up for dd's (11, 12 in July) college expenses .. i'm still paying on my own SL and saving for my retirement so her college funds are not a priority right now.
We have a 529 for both girls and put the same amount for both of them each month. DD1 is almost 3 and it's done pretty well and she has a good amount in it already! We also shared a link with family and some of DHs brother have contributed as a gift - as a parent I love that it's thoughtful and not another toy for us to store lol
One item to keep in mind if you send links to family where they can contribute directly to the 529- if you do this, you'll miss out on the tax deduction (if your state offers this).
It's financially better for you to have them give you the money first, and then you contribute to the 529.
Post by redheadbaker on Apr 19, 2021 18:31:33 GMT -5
We have a 529 plan for DS. I have a small amount deducted for each paycheck, post-tax. My employer contributes a little every year, too.
I figure even if DS gets a scholarship (academic or sports), he can use the money for room & board or off-campus housing, fees, books & supplies, etc. And if he really doesn't need a dime of it, we can change the beneficiary down the line if he has kids.
We have a 529 set up but all the savings is going to one account. We can redistribute it later amoung the four kids when we know more about who has what educational expenses. It made sense to do our state as we get a tax deduction.
My financial advisor suggested a custodial account, so that's what we have.
A custodial account can be beneficial when there's no chance of your child qualifying for financial aid. It has fewer restrictions. But if you (OP I mean, not "you" bronxgirl) think your kids may qualify for aid, a custodial account I believe would count against them more than a 529. (Money in the child's name counts "more" than money in the parent's name when determining family contribution.)