Do any of you use a 529 college savings plan?

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ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

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7,733 posts
Sep 16, 2013 8:41 AM
My wifes car payment is up and we're thinking about taking that money and putting it into a 529 college savings plan for our 5 month old. They're estimating it will only fund $150,000 but we can either fund it higher or he can pick up the balance of anything over $150,000.
Do any of you guys do the 529 savings plan?
What's your views on it?
Sep 16, 2013 8:41am
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Sep 16, 2013 8:49 AM
I've been wanting to look into different investments, as right now, I only drop about $50/month ($25/check) into each of my daughter's savings accounts, early a whopping .01% interest. I just haven't had the time to focus on it. We're saving up for something, we're just not sure what. We don't know if this will be a "wedding fund," give it to them for school, or just save it for them to have some day. When they turn 18, they'll have ~$12,000. I know it's not much, but it's something. I'd like to get a little better return on something, however.
Sep 16, 2013 8:49am
LJ's avatar

LJ

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16,351 posts
Sep 16, 2013 8:51 AM
We use the Blackrock 529. Anyone that is related to the child can put money into it, and it's a deduction on your state taxes. Only been using it for about 6 months now (have to have the child's SSN before it can be opened) but we like it so far.
Sep 16, 2013 8:51am
C

Con_Alma

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12,198 posts
Sep 16, 2013 9:10 AM
State and federal tax free earnings with a State tax deduction for contributions. Child id the beneficiary not the owner.

Ohio has approved and authorized both Blackrock and Vanguard for use but an Ohio resident can use ANY plan. You will not receive the State benefits of taxation if you stray to other plans.
Sep 16, 2013 9:10am
ernest_t_bass's avatar

ernest_t_bass

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Sep 16, 2013 9:35 AM
What's the general return on one of these?
Sep 16, 2013 9:35am
ernest_t_bass's avatar

ernest_t_bass

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Sep 16, 2013 10:02 AM
ccrunner609;1501107 wrote:I think the return is better then the market cause the management fees are less.

Do you have a fixed rate? And does this HAVE to be used towards college?
Sep 16, 2013 10:02am
ernest_t_bass's avatar

ernest_t_bass

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Sep 16, 2013 10:11 AM
Thanks, AAF. I've already been to their site, but considering some of you currently invest with this method, you could answer my questions better, without me having to dig.
Sep 16, 2013 10:11am
W

WebFire

Go Bucks!

14,779 posts
Sep 16, 2013 10:32 AM
I've always thought if you used it for anything different than college, they hammered the shit out of it in fees.
Sep 16, 2013 10:32am
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Con_Alma

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12,198 posts
Sep 16, 2013 10:34 AM
ccrunner609;1501107 wrote:I think the return is better then the market cause the management fees are less.
?????

Huh?

The "management fees" are listed in the respective prospectus of Black Rock or Vanguard and depend on the mutual fund selected. A person can generally select the sames fund outside of a 529 plan and have the same "management fees".

A 529 plan is a tax status/treatment as opposed to an investment. The investment is the selected fund.
Sep 16, 2013 10:34am
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Con_Alma

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12,198 posts
Sep 16, 2013 10:37 AM
ernest_t_bass;1501109 wrote:Do you have a fixed rate? And does this HAVE to be used towards college?
IN order to maintain the tax benefit the funds must be used for secondary education expenses. If you don't use them for educational expenses you simple are charged taxes on the gains both federally and from the State. In addition, you must "give back" the tax deduction you received on the contributions. It's called a penalty but it's really just getting rid f the tax benefit you were given.
Sep 16, 2013 10:37am
Belly35's avatar

Belly35

Elderly Intellectual

9,716 posts
Sep 16, 2013 11:06 AM
ZWICK 4 PREZ;1501090 wrote:My wifes car payment is up and we're thinking about taking that money and putting it into a 529 college savings plan for our 5 month old. They're estimating it will only fund $150,000 but we can either fund it higher or he can pick up the balance of anything over $150,000.
Do any of you guys do the 529 savings plan?
What's your views on it?
WTF Z4P you mean you took the responsibility to paid off the car and planning to use that money for the kids future. Taking your money and investing in the kids and family future that not right, the government will provide that education. This is not your money or your wife hard earn income and then you're going to take the money and build a better life. I sure hope you also start a plan for those entitlement kids. You are that person that the Occupied people and the Entitlement crowd hate, taking what you work hard for (that's not yours, you did build that right to earn money the government did that) and using it for yourself greed. … Z4P what a hypocrite
Are you sure deep down, your not just like me...
Sep 16, 2013 11:06am
LJ's avatar

LJ

Senior Member

16,351 posts
Sep 16, 2013 11:11 AM
ccrunner609;1501171 wrote:Don't set this up through an investment firm. THey will hammer you with fees and likely take 2%. State operated 529 will be less then 1%

If you already have an advisor they will administer a Blackrock or Vanguard for you for no extra fees. If I get checks from family members I just send it to my advisor with everything else quarterly or so and he gets it into my Blackrock. He also monitors it for me, includes it in my summary statements, and will move money from other accounts into it, all for free.
Sep 16, 2013 11:11am
Belly35's avatar

Belly35

Elderly Intellectual

9,716 posts
Sep 16, 2013 11:14 AM
WebFire;1501140 wrote:I've always thought if you used it for anything different than college, they hammered the shit out of it in fees.
This is a important aspect. ... read the fine print. What if the kid doesn't need the college funds ?
Sep 16, 2013 11:14am
LJ's avatar

LJ

Senior Member

16,351 posts
Sep 16, 2013 11:16 AM
ccrunner609;1501178 wrote:haha.....nothing is free bro.

Except I am not charged anything for it, on any of my accounts. So yeah, no extra fees.
Sep 16, 2013 11:16am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

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7,733 posts
Sep 16, 2013 11:20 AM
Belly35;1501169 wrote:WTF Z4P you mean you took the responsibility to paid off the car and planning to use that money for the kids future. Taking your money and investing in the kids and family future that not right, the government will provide that education. This is not your money or your wife hard earn income and then you're going to take the money and build a better life. I sure hope you also start a plan for those entitlement kids. You are that person that the Occupied people and the Entitlement crowd hate, taking what you work hard for (that's not yours, you did build that right to earn money the government did that) and using it for yourself greed. … Z4P what a hypocrite
B/c every Democrat thinks they and their family should be taken care of by the government? lol.. Only far right/left wing nuts jobs, such as yourself, would typecast a group. Well ignorant people too.. but they make up the right/left wings of America.
Belly35;1501169 wrote: Are you sure deep down, your not just like me
Yes deep down I'm dying to suck Glenn Becks dick.
Sep 16, 2013 11:20am
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Sep 16, 2013 11:21 AM
Belly35;1501169 wrote:WTF Z4P you mean you took the responsibility to paid off the car and planning to use that money for the kids future. Taking your money and investing in the kids and family future that not right, the government will provide that education. This is not your money or your wife hard earn income and then you're going to take the money and build a better life. I sure hope you also start a plan for those entitlement kids. You are that person that the Occupied people and the Entitlement crowd hate, taking what you work hard for (that's not yours, you did build that right to earn money the government did that) and using it for yourself greed. … Z4P what a hypocrite
Are you sure deep down, your not just like me...
Good gad, STFU
Sep 16, 2013 11:21am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Sep 16, 2013 11:22 AM
Belly35;1501179 wrote:This is a important aspect. ... read the fine print. What if the kid doesn't need the college funds ?
If he recieves a scholarship and doesn't need it, there's no penalty. If you cash it out, you pay an income tax. Or you can change the beneficiary to someone else.
Sep 16, 2013 11:22am
ernest_t_bass's avatar

ernest_t_bass

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24,984 posts
Sep 16, 2013 11:23 AM
LJ;1501175 wrote:If you already have an advisor they will administer a Blackrock or Vanguard for you for no extra fees. If I get checks from family members I just send it to my advisor with everything else quarterly or so and he gets it into my Blackrock. He also monitors it for me, includes it in my summary statements, and will move money from other accounts into it, all for free.
How much do you pay your financial advisor?
Sep 16, 2013 11:23am
LJ's avatar

LJ

Senior Member

16,351 posts
Sep 16, 2013 11:29 AM
ernest_t_bass;1501194 wrote:How much do you pay your financial advisor?
I typically use their Morgan Stanley funds, so the basic management fees out of those. My Blackrock is around .95% taken directly by Blackrock, Morgan Stanley doesn't touch it besides deposits. It's 2% anually on all the accounts - Blackrock. There are some accounts that are only 1% (typically ones that are fully in MS funds)
Sep 16, 2013 11:29am
C

Con_Alma

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12,198 posts
Sep 16, 2013 11:35 AM
ccrunner609;1501171 wrote:Don't set this up through an investment firm. THey will hammer you with fees and likely take 2%. State operated 529 will be less then 1%


read #1

http://www.forbes.com/sites/learnvest/2013/07/18/529-savings-plans-9-mistakes-people-often-make/
What you choose to pay an advisor is up to you and your advisor.

I am speakign specifically about a 529 plan. The investment management fees are the same if you have a 529 plan or are choosing the funds outside of a 529 plan.
Sep 16, 2013 11:35am
McFly1955's avatar

McFly1955

Senior Member

1,441 posts
Sep 16, 2013 12:20 PM
I have a 529 plan for both of my daughters (ages 3 and 1).

Our is through CollegeAdvantage

We do a small monthly contribution now, and then a larger contribution for birthdays/holidays, and also put any money that they receive from relatives into this account.


Have had no problems, and the money is currently invested in an aggressive portfolio, which I will monitor and re-evaluate as they get close to college age (they have funds that do this for you, but I prefer to do this on my own).
Sep 16, 2013 12:20pm
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Con_Alma

Senior Member

12,198 posts
Sep 16, 2013 12:27 PM
McFly1955;1501252 wrote: Our is through CollegeAdvantage

...
Thats the name of the Ohio plan. Anyone enrolling in the Ohio plane is through "College Advantage". Are you using Vanguard funds or BlackRock funds?
Sep 16, 2013 12:27pm
McFly1955's avatar

McFly1955

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1,441 posts
Sep 16, 2013 12:40 PM
Con_Alma;1501257 wrote:Thats the name of the Ohio plan. Anyone enrolling in the Ohio plane is through "College Advantage". Are you using Vanguard funds or BlackRock funds?
I use vanguard funds...I also have a Roth through Vanguard that I've been happy with.
Sep 16, 2013 12:40pm
OSH's avatar

OSH

Kosh B'Gosh

4,145 posts
Sep 16, 2013 2:17 PM
Con_Alma;1501149 wrote:IN order to maintain the tax benefit the funds must be used for secondary education expenses. If you don't use them for educational expenses you simple are charged taxes on the gains both federally and from the State. In addition, you must "give back" the tax deduction you received on the contributions. It's called a penalty but it's really just getting rid f the tax benefit you were given.
And that is the major "grey area" for 529 plans. Technically, it's "higher education" as secondary education is grades 5 or 6 through 12 (middle and high school). But, terminology aside, education expenses can be any number of things.

I know people who have used 529 funds for buying a car for college. It was a necessary education expense to get to and from OR around school. I guess an individual would just have to be prepared for that potential investigation if it were to happen.

I have been researching 529 plans for awhile now. I plan on getting one set up for my kids. The last thing I heard was Utah's 529 plans have the best return. I'll wait it out to see what I can get and what may be the best option when kids come around.
Sep 16, 2013 2:17pm