College Savings Plan – 529

[SD Transplant]

Hi Piggs,

Could you recommend a proper way, venue and/or institution that can be trusted with a college savings (529) plan? I have about 8 years to go, but I am in position to start putting money aside. Any tips from someone that has started this process?

NOTE: I see there aren’t limits, but up to $15K/year isn’t considered a gift.

Cheers,

[spdrun]

Have your kid move to NY or any other state that offers free 4-yr college a year before matriculation. They can work in a cheap area of the state for a year, then go to SUNY or CUNY for virtually free, especially if your income is under $120000 for those years.

[Hobie]

They are really pretty simple. You have a lot of options as to what the investment instrument is. Just research it as any other brokered investment product. ie mutual fund

If you take any money out non educated related, you pay at your normal income tax rate state/fed plus a 10% penalty.

Can’t remember if the checks toward education are paid with 2 signatures or just directly to the institution.

This calculator will help you evaluate a particular plan:

https://tools.finra.org/529_calculator/main

good info here too:

Home

[Coronita]

send me a PM. Too many people with no kids will respond to this thread who have no clue on how to invest. you’re probably trying to figure out the difference between one plan versus the other.

[spdrun]

Why should you invest if you can get a government to give it for free? State university in a state that offers a full ride under an income threshold, make sure your income is below the threshold. If they have to work for a year to establish residency, so be it.

[Coronita]

.

[Coronita]

lol… see what I mean….

I am pretty confident if you live in San Diego with kids and your household AGI is less than $120k, the last thing you are thinking about is a 529k. You are probably thinking about damn, it’s tough out here. so I would assume.those considering the 529k plan have a household AGI above that.

Also, for those of us that make more than that, some of us have no desire to be on the east coast. especially for a state school. You can’t argue all you want being on a cheap(er) budget. And maybe for you, that’s out of necessity because you have a smaller budget. And that certainly your choice if you intentionally want to earn less. But for the rest of the population that wants to and has the capability to earn more, has earned and accumlated more, there is no desire (and more importantly) no need to go on a cheap budget. Not that there is anything wrong with it too
Just different strokes for different folks. Which is exactly why your response is completely useless.

Plus the 529k plan isn’t just for tuition, it also includes incidentals like room and board , books, etc. None of which is completely covered. Like I said, none if this is information you would know about or consider if you don’t have kids. Which makes commenting on this moot if you don’t. It’s almost as dumb as a president that had no prior presidential skills. oh oops…

[spdrun]

Some of us attended state schools on the East Coast and liked it just fine. You won’t be attending the school, the kid will be. Private schools are overrated.

Also, AGI can be adjusted below $120k for a few years to meet “standards” — if you have paid off homes, take a pay cut. The rich play the subsidy game, why not the middle class?

[Myriad]

Well, there’s those people in IL that changed custody of their kids to a different legal guardian to get scholarships. That seems easier than moving to the east coast.

[Coronita]

[quote=spdrun]Some of us attended state schools on the East Coast and liked it just fine. You won’t be attending the school, the kid will be. Private schools are overrated.

Also, AGI can be adjusted below $120k for a few years to meet “standards” — if you have paid off homes, take a pay cut. The rich play the subsidy game, why not the middle class?[/quote]

But you admitted on a different thread you attended an expensive private school… So what do you mean by “some”?

Not only are you giving out advice for something you didn’t do. You are giving out advice for kid and family you currently don’t have for now or for the foreseeable future with an AGI you probably don’t have too.

If this isn’t the most ridiculous thing ever, I dont know what is. Anyone with a shred of logic would see it the same way.

OP asked a very simply question. OP probably already put a lot of thought into it. OP isnt asking for a what you think about public schools in New York. For all we know there might be very specific reasons why he or she isn’t interested. And given that he/she is only talking about starting a 529k account, it means his/her kid are young and a lot of things can happen from now until then. For example, your foolish idea of counting taking a lower AGI just into a public school in New York could completely blow up 16-18 years later when his/her kid actually is old enough to attend and when, due to state budgets, free isn’t free because the state runs out of money. You don’t know, and as a parent you would be stupid to count on any state assistance that currently exists today to still be there 16-18 years later, especially of you are the borderline of being middle class and reasonably well off by admissions standard. This is the sort of stupid short sightedness that 80+% of the American population make thinking future benefit will be there and find out it’s not and, well, get screwed. It’s the same inane foolishness similar to waiting for that one big investment score while it’s been proven time and time again proper long term planning, small investment decisions along the way, on average trounces those one shot, one hit, one time big bang investments people try to score only to be wrong and get left behind because one’s single time gamble blew up and didn’t occur the way one wanted. There is no replacement for well planned , well thought out, small, decisions over a longer period of time that limits single instance big risk and uncertainty even if at any instance in time the world briefly blows up.

The only exception is if you really are poor, and then you have nothing to lose, which would defeat the entire point of this discussion because some who really is poor wouldn’t be thinking about a 529k plan.

Is it really that difficult for to answer a simple question asked by the OP and nothing else?

[Myriad]

Back to the original post.
The drawback of the 529 is that it can impact the student’s financial aid package.
https://www.reuters.com/article/us-column-feldman-529/dont-let-that-529-college-plan-hurt-your-financial-aid-idUSBRE93S0LZ20130429

The argument can be made that non-parents shouldn’t use the 529’s for the “future” student. They’re better off paying the tuition directly which doesn’t count as a gift to the IRS.
As for a 529 owned by the parent or student, you could invest in 401k/IRA instead, but there of course are limitations associated with those vehicles vs 529.
https://www.cappex.com/articles/money/how-to-shelter-assets-on-the-fafsa

[Coronita]

[quote=Myriad]Back to the original post.
The drawback of the 529 is that it can impact the student’s financial aid package.
https://www.reuters.com/article/us-column-feldman-529/dont-let-that-529-college-plan-hurt-your-financial-aid-idUSBRE93S0LZ20130429

The argument can be made that non-parents shouldn’t use the 529’s for the “future” student. They’re better off paying the tuition directly which doesn’t count as a gift to the IRS.
As for a 529 owned by the parent or student, you could invest in 401k/IRA instead, but there of course are limitations associated with those vehicles vs 529.
https://www.cappex.com/articles/money/how-to-shelter-assets-on-the-fafsa%5B/quote%5D

529ks can pretty much be rolled over from one account to another belonging to the same owner. 529 accounts can also be rolled over between accounts for the same beneficiary. The beneficiary of a 529k account can also be changed. The gift tax exemption per person is now more than 10million making large rollovers among beneficiary moot… 4 variables to play with years before college…..

[Myriad]

[quote=flu]529ks can pretty much be rolled over from one account to another belonging to the same owner. 529 accounts can also be rolled over between accounts for the same beneficiary. The beneficiary of a 529k account can also be changed. The gift tax exemption per person is now more than 10million making large rollovers among beneficiary moot… 4 variables to play with years before college…..[/quote]

True, but you don’t have to file the paperwork if you go over the $15/year. Not that the IRS is really checking that closely though.

[Coronita]

[quote=Myriad][quote=flu]529ks can pretty much be rolled over from one account to another belonging to the same owner. 529 accounts can also be rolled over between accounts for the same beneficiary. The beneficiary of a 529k account can also be changed. The gift tax exemption per person is now more than 10million making large rollovers among beneficiary moot… 4 variables to play with years before college…..[/quote]

True, but you don’t have to file the paperwork if you go over the $15/year. Not that the IRS is really checking that closely though.[/quote]

True… I was thinking of the other case. Let’s say one fvcked up and had $200k extra in Timmy’s 529k and didn’t want that towards his assets as part of financial aid consideration. Mommy Jane rolls over $200k into Timmy’s 529k owned by Uncle Bob. Uncle Bob rolls over $200k into Niece Jane account also owned by Uncle Bob. Niece Jane and Nephew Timmy not related.

Poof.. $200k gone from Jimmy’s household 2-3 years prior to financial aid consideration…. Of course bringing that money back into play the following year is a challenge. Which is a second exercise of a different kind.

But I should warn that while most public schools dont consider equity in primary home as assets, most private schools do… Forget about financial aid if you own 5-6 rental properties free and clear. Which is why for many folks, it’s not even a question.. Financial aid is clearly off the table…which is even more of a reason to get a 529k started as early as possible.

Personally, even if I could hide my assets and get need based financial aid, I wouldn’t do it. I figure there are people who actually need it. But that’s my personal decision.

[scaredyclassic]

http://Www.wealthfront.com

I like it

[Author]

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