Questions and opinions on 529 plans (College savings plans)
Thread Starter
Member
Joined: Nov 2000
Posts: 2,770
Likes: 0
Questions and opinions on 529 plans (College savings plans)
I just started to research these savings plans and was wondering if there is anything to watch out for. I know that all investments have risks, but was wondering about any other "gotchas" about these programs.
For those that have the means, I don't see why you would not take part in these plans? They provide immediate tax benefits and the earnings grow tax-deferred.
If you have started these plans for your childern, have you run into any sort of problems after you opened up the accounts?
For those that have the means, I don't see why you would not take part in these plans? They provide immediate tax benefits and the earnings grow tax-deferred.
If you have started these plans for your childern, have you run into any sort of problems after you opened up the accounts?
Member
Joined: Sep 2000
Posts: 3,698
Likes: 0
sang - md's two plans are pretty good, and they compliment each other...
both are 529 plans and both will give you a state tax deduction...just watch for the allocation of funds -- the best allocation (between stocks, bonds, cash-equivalents, etc) depends upon how long it is until you need the funds...also watch for fees...md's plans are run by t rowe price and have reasonable fees (not the lowest but far from the highest).
you might find another state plan with somewhat lower fees and perhaps what you consider to be better investment portfolions -- but they won't be deductable at the state level. i looked at a number of plans, and decided to go with md (although that may not be the right choice for everyone -- even everyone in md!).
you might find another state plan with somewhat lower fees and perhaps what you consider to be better investment portfolions -- but they won't be deductable at the state level. i looked at a number of plans, and decided to go with md (although that may not be the right choice for everyone -- even everyone in md!).
Elder Member
Joined: Aug 2000
Posts: 13,790
Likes: 0
Sang, check out this link. There are a bunch of others too.
It sounds like your best bet is to get into a state that offers the best investment options. If you're not into T. Rowe Price (MD), then you can join a plan in any other state that has the investment options you're looking for.
<a href="http://www.savingforcollege.com/" target="_new">Saving For College</a>
<a href="http://www.savingforcollege.com/" target="_new">Saving For College</a>
Thread Starter
Member
Joined: Nov 2000
Posts: 2,770
Likes: 0
The fees and type of investment strategies offered by T-Rowe price are fine
and I too agree that their fees seem reasonable.
I was tinckering with the idea of doing both plans and it seems as though that might be a wise choice instead of opening up multiple accounts within one savings plan. The tax benefits are the same and the trust plan seems to be a conservative plan so I can hedge with the other plan and be a little more aggressive.
Thanks Dave!
I was tinckering with the idea of doing both plans and it seems as though that might be a wise choice instead of opening up multiple accounts within one savings plan. The tax benefits are the same and the trust plan seems to be a conservative plan so I can hedge with the other plan and be a little more aggressive.
Thanks Dave!
Thread Starter
Member
Joined: Nov 2000
Posts: 2,770
Likes: 0
Thanks, that is a good site.
Getting into another State's plan doesn't appeal to me. Taking advantage of the state's income tax deduction will offset the higher fees that T-Rowe may be charging (not that high IMO).
Eighth Member of AudiWorld. God-like, glorious and all-knowing.
Joined: Mar 2000
Posts: 21,469
Likes: 3
They may be a smart investment for parents. I've done some of them for my clients...
The investment options are somewhat limited, but sometimes that's a good thing. The most important things I might suggest are:
1. Do it if you can afford it.
2. Don't get too terribly conservative, unless the child is approaching the age where they'll need the funds. In other words, interest rates are low which means that bond yields are low and accordingly, bond prices are high. Use a lot of caution with bonds in this environment.
Disclaimer: Opinions expressed are solely my own. The preceeding is for general informational purposes only. It should not be considered an offer, solicitation or recommendation to buy or sell any security.
1. Do it if you can afford it.
2. Don't get too terribly conservative, unless the child is approaching the age where they'll need the funds. In other words, interest rates are low which means that bond yields are low and accordingly, bond prices are high. Use a lot of caution with bonds in this environment.
Disclaimer: Opinions expressed are solely my own. The preceeding is for general informational purposes only. It should not be considered an offer, solicitation or recommendation to buy or sell any security.
Trending Topics
AudiWorld Stories
Bringing Audi to Life for Audi Fans
10 Strangest Audi Designs That Actually Made Production
Joe Kucinski
2027 Audi Q7 and SQ7: Audi Upgraded EVERYTHING!
Michael S. Palmer
Audi Unveils Absurdly Cool New Supercar: 10 Things You Need to Know!
Verdad Gallardo
The Highs & Lows of Every Audi C-Class Generation
Joe Kucinski
Top 10 Most Expensive Audis Ever Sold on Bring-A-Trailer
Brett Foote
10 Audi Features & Options We Miss the Most!
Joe Kucinski
Audi Recreates Crazy-Looking Speed Record Breaker From 1935
Verdad Gallardo
Coachbuilder Recreates the 1995 Audi TTS Concept
Verdad Gallardo
Every Audi V10 Car Ranked!
Joe Kucinski
Eighth Member of AudiWorld. God-like, glorious and all-knowing.
Joined: Mar 2000
Posts: 21,469
Likes: 3
Re: Based on what I have seen, the fees are mostly low and pretty similar. Here's a link...
To one site which may offer some good info. Again, this is not a recommendation or solicitation.<ul><li><a href="http://www.vankampen.com/products/529/intro.asp">529 Info</a></li></ul>
