College Savings Plans

[catastrophe]

Has anyone messed with a 529 plan or any other type of college savings plan?  I'm especially intrigued by the 529 "prepaid tuition" plan, although it sounds kinda crazy to me.

[steve dave]

We have reg 529b plans for both lil sd and lil girl sd. NE has a really good 529b. Can deduct from state taxes.

[Kat Kid]

should be taxed.

[Pete]

If you haven't maxed out both your 401K and your IRA, then the math says do that before you put money in a 529, and just pay out of pocket for school (or pay your kids' student loans for them later and let them take the deduction)

[Pete]

If you haven't maxed out both your 401K and your IRA, then the math says do that before you put money in a 529, and just pay out of pocket for school (or pay your kids' student loans for them later and let them take the deduction)

Also, this strategy is a nice hedge against "I want to go find myself and be a painter, Dad."

[steve dave]

If you haven't maxed out both your 401K and your IRA, then the math says do that before you put money in a 529, and just pay out of pocket for school (or pay your kids' student loans for them later and let them take the deduction)

good advice here

[catastrophe]

We have reg 529b plans for both lil sd and lil girl sd. NE has a really good 529b. Can deduct from state taxes.

From what I've read, TX's plan is pretty bad (high fees), but some states like NY have good ones and allow out of staters. Would you have done it without the state deductions? No income tax here so that benefit means nothing to me.

[catastrophe]

If you haven't maxed out both your 401K and your IRA, then the math says do that before you put money in a 529, and just pay out of pocket for school (or pay your kids' student loans for them later and let them take the deduction)

This is a pretty great idea.

[steve dave]

We have reg 529b plans for both lil sd and lil girl sd. NE has a really good 529b. Can deduct from state taxes.

From what I've read, TX's plan is pretty bad (high fees), but some states like NY have good ones and allow out of staters. Would you have done it without the state deductions? No income tax here so that benefit means nothing to me.

it grows tax free so we'd probably have done it anyway. like pete said though, make sure you max out your other tax advantaged options first.

[catastrophe]

Seems to make it pretty simple then. I'll just put this at the bottom of the ol' tax-advantaged accounts contribution waterfall. Thanks cats!

[8manpick]

should be taxed.

No kidding.  Just another tax loophole for the rich.

[Brock Landers]

Just tell your kids to hit the books a little harder than they already are.

[star seed 7]

Make them pay for their own college

[Pete]

Make them pay for their own college

The "pay your kids' student loans" approach gives you the ability to switch to that if they flip out or whatever. 

[Pete]

AND, as the child of parents who didn't save as much for retirement as they would have liked, I would definitely prefer to have more student loans and have more peace of mind thinking about my parent's retirement. 

Then, if you have saved for retirement properly, and you die early, your kids get it anyway.

[Pete]

And here's yet another one to noodle on....I'd rather have my kid go to tech school of some sort than get a history degree or some bullshit liberal arts degree (I have a bullshit liberal arts degree, but a grad degree too).   Those tech schools cost less, and the grads make more!

[Pete]

My parents are world class humans, farm kids from Osage County, but they didn't know jack crap about any of this stuff....thought If you just got "a college degree" you'd have it made.  God bless them, but LOL.

[star seed 7]

My parents are world class humans, farm kids from Osage County, but they didn't know jack crap about any of this stuff....thought If you just got "a college degree" you'd have it made.  God bless them, but LOL.

Well it used to be like that

[mocat]

My parents are world class humans, farm kids from Osage County, but they didn't know jack crap about any of this stuff....thought If you just got "a college degree" you'd have it made.  God bless them, but LOL.

mrs mocat is from osage county. wow two great folks from the same county. go cats.

[Mikeyis4dcats]

My parents are world class humans, farm kids from Osage County, but they didn't know jack crap about any of this stuff....thought If you just got "a college degree" you'd have it made.  God bless them, but LOL.

Well it used to be like that

yeah, you used to be able to get a prt time job and pay for college while in school.    Last I looked KSU was somewhere north of $285/credit hr.    In 99 when I graduated I think it was $65?

[catastrophe]

About a decade ago I had a "full tuition" scholarship at $2,500 a semester.

[catastrophe]

AND, as the child of parents who didn't save as much for retirement as they would have liked, I would definitely prefer to have more student loans and have more peace of mind thinking about my parent's retirement. 

Then, if you have saved for retirement properly, and you die early, your kids get it anyway.

More solid points. It goes both ways for sure.

My (early )retirement is in pretty good shape atm, but I've already decided either way if we pay for any of our kids' college we're not going to tell them our intentions until we actually start doing it.

[catastrophe]

I mean, I paid my own way, but college tuition is going up at a ridiculous pace and I was helped by financial aid that probably won't be available to my kids. Uncle Sam expects parents to pay for their kids' tuition if they can afford to.

[Dugout DickStone]

Dug's inlaws started one for each of my 6 daughters in Nevada I think.  I think there is already enough so they can go to whatever super fancy school they want.  Inlaws with cake are the best

[catastrophe]

Update: this is happening.  Took the easy option of a 529 through Vanguard (which is a Nevada plan).

Next question, how much money should go in this thing? I have no idea what a reasonable amount would be for college in like 18 years.