529 plans, negative experiences? Alternatives?
529 plans, negative experiences? Alternatives?
have any of you funded a 529 plan and either regretted it in favor of an alternative vessel? What other way in hind sight would have been just as good or more flexible?
I have no clue as to what a « 529 plan » is, so most likely, I didn’t fund one ever.
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S&W collector
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A 529 plan is about the only good way to save for kids college. Just make sure you have the plan with a company that doesn't charge High fees
I found what it was. I confirm my answer, never.
Florida's prepaid college tuition fund has various options the cover either tuition only or tuition + fees etc.. It can be used at out-of-state schools which are frequently charging less for out-of-state students than Florida charges for in-state. My daughter spent the first year of her college life in Texas using her Florida prepaid fund and it ended up with a surplus that she was able to cash out at the end.
You can go completely paid up front (buy once, cry once), or pay it off in installments.
You can go completely paid up front (buy once, cry once), or pay it off in installments.
....and some rin up hill and down dale, knapping the chucky stanes to pieces wi' hammers, like sae mony road-makers run daft - they say it is to see how the warld was made!
Saint Ronan's Well - Sir Walter Scott, Bart. (1824)
Saint Ronan's Well - Sir Walter Scott, Bart. (1824)
I got the Florida Pre-paid when it first came out for one son, and the other son got it when he was born. Back in those days it was a GREAT deal. Then they figured out it was too good of a deal and really jacked up the rates to keep up with paying the ever increasing fees.
Make sure you get the "fees" plan as those can be a LOT of $. For room and board, I bought only two years.
With out Florida Prepaid, there would have been no way I could have afforded their Libiturd indoctrination.
Make sure you get the "fees" plan as those can be a LOT of $. For room and board, I bought only two years.
With out Florida Prepaid, there would have been no way I could have afforded their Libiturd indoctrination.
Ah that's one thing about our Flame, doesn't play any favorites! Flame hates everybody!
We have 529s for both kids.
We recently went to one of those ‘how to pay for college’ seminars and they mentioned that the 529 would most likely be counted against the student when applying for financial aid. We’ll find out how much this matters in another two years i guess.
We recently went to one of those ‘how to pay for college’ seminars and they mentioned that the 529 would most likely be counted against the student when applying for financial aid. We’ll find out how much this matters in another two years i guess.
So my son’s 529 lost about 12% in the last quarter but I expect it to rebound based on the market this past couple weeks. I chose the 529 plan administered by the FL Prepaid when I bought prepaid plan when my kid was born with the intention to use it for housing in case he wanted to stay off campus. I like the platform where I can send qualified payments directly to the college for dorm costs but you will need to document all qualified expenses when you make withdrawals or face making the distribution a taxable event. This past semester my kid was given a prorated refund for dorms due to the virus and I had to put the refund immediately back into the 529 or face a unqualified distribution. Still, it is a great way to save for your kid’s college without getting hit with capital gains or 1099 int.
As tempting as it might be (and God knows it is) one shall never, ever let the tax tail wag the investment dog.
We are going through rapidly changing times and locking your cash long term in this type of account is likely going to be sub-optimal.
I am not saying that those with 401(k)s / IRAs etc. aren't going to be fine. They are probably going to be (at least nominally speaking).
But it is an inefficient and in the current environment quite risky way to invest (see what happened to most 401(K) in Feb/March).
Look at the graph at the bottom of my post, I just screen-shot it directly from the St Louis Fed Website.
Is the stock market going up? Are rates going to zero? Yes seems to be the correct answer to both questions.
In this context even Stevie Wonder and Gilbert Montagné (that one's for legio) should be able to spot investments that are going to outperform the absolute living crap out of both the US stock and debt markets. And if you are locked into most of these government sponsored accounts, none or few of these investments are going to be accessible to you.
That is taking on a lot of risk for average returns combined with a high lost opportunity cost.
I can only speak for myself, but I simply would not go that route this late in the game.
The above should in no way be construed as investment advice.
It is my 02 on the matter and worth exactly what you paid for it
We are going through rapidly changing times and locking your cash long term in this type of account is likely going to be sub-optimal.
I am not saying that those with 401(k)s / IRAs etc. aren't going to be fine. They are probably going to be (at least nominally speaking).
But it is an inefficient and in the current environment quite risky way to invest (see what happened to most 401(K) in Feb/March).
Look at the graph at the bottom of my post, I just screen-shot it directly from the St Louis Fed Website.
Is the stock market going up? Are rates going to zero? Yes seems to be the correct answer to both questions.
In this context even Stevie Wonder and Gilbert Montagné (that one's for legio) should be able to spot investments that are going to outperform the absolute living crap out of both the US stock and debt markets. And if you are locked into most of these government sponsored accounts, none or few of these investments are going to be accessible to you.
That is taking on a lot of risk for average returns combined with a high lost opportunity cost.
I can only speak for myself, but I simply would not go that route this late in the game.
The above should in no way be construed as investment advice.
It is my 02 on the matter and worth exactly what you paid for it
"Tuez-les tous, Dieu reconnaîtra les siens" - Arnaud Amaury 1209
You should be in a 529 plan. You should not, ever, ever, be in any 529 plan that is not direct sold.
Go to Clark Howard's web page, read the 529 plan guide, get yourself a Utah or Arizona plan... We have no income tax, so no need to worry about the potential for credits if you go in your own state plan.
Oh oh... you need to own the account, with a specified beneficiary, they should not own the account.
Florida prepaid is a good choice- the best of any of the pre paids, but you get hammered if the student dies (unpleasant, but happens), if they go out of state, if they convert to a different level than paid, or if they scholarship out.
Go to Clark Howard's web page, read the 529 plan guide, get yourself a Utah or Arizona plan... We have no income tax, so no need to worry about the potential for credits if you go in your own state plan.
Oh oh... you need to own the account, with a specified beneficiary, they should not own the account.
Florida prepaid is a good choice- the best of any of the pre paids, but you get hammered if the student dies (unpleasant, but happens), if they go out of state, if they convert to a different level than paid, or if they scholarship out.