529's

[tmare_IHB]

How are those of you who set these up for their kid's college education feeling about them now? I started with $10K and have put $400 a month in ever since (a few years ago). The accounts are now worth less than I put in. Should I continue? Some advice says yes in order to buy cheap (?). Should I pull it all or leave it? I just didn't find any other tax free way of saving at the time I opened these accounts, but now I think I should consider something else. I've been considering just discontinuing any further deposits. Advice anyone?

 

[25inIrvine_IHB]

I don't really have any advice, but I think one question many will ask is "how far are your kids from college? how old are they?"

 

[tmare_IHB]

I don't really have any advice, but I think one question many will ask is "how far are your kids from college? how old are they?"

Yes, I guess I did forget that, they are 3 and 4 years old. How about advice now?

 

[ipoplaya_IHB]

I don't really have any advice, but I think one question many will ask is "how far are your kids from college? how old are they?"

Yes, I guess I did forget that, they are 3 and 4 years old. How about advice now?

Keep on slamming those deposits in and keep averaging down... I am continue to do $200 per month per kid. I did rebalance into a more conservative investment option and allocation earlier this year to preserve capital. It's probably about time to move back into more aggressive equity investment options there I'd think.

I love my Fidelity 529 card and its free contributions. I have a Mastercard that they no longer offer that gives 2% toward 529 with a $1500 annual limit. I usually hit that cap in 8-9 months and shift all my charges over the 529 Amex until the Mastercard kicks back in with rewards.

 

[25inIrvine_IHB]

I 2nd that card. If I had kids, that would be the first card i'd use. I already suggested it to my sister and her husband who are expecting there first child.

But now that you stated the age. I would also keep pumping the equities, 15 years is a long time that you have to beat inflation. Maybe you should PM blackvault

 

[biscuitninja_IHB]

Yep! I do the same with Fidelity's card. I do not have children, but one account is going to my nephew (the only child of the entire family...). Ohh, he is 4 months old, I just started the account with 50k and just maximize in just under 12 months. Anyways good luck

-bix

 

[tmare_IHB]

Yep! I do the same with Fidelity's card. I do not have children, but one account is going to my nephew (the only child of the entire family...). Ohh, he is 4 months old, I just started the account with 50k and just maximize in just under 12 months. Anyways good luck

-bix

Aren't you concerned with what happens if he ends up the only child in the family and decides not to go to college or can't use the total amount, I know college costs will go up, but what if it's too much?

 

[biscuitninja_IHB]

Yep! I do the same with Fidelity's card. I do not have children, but one account is going to my nephew (the only child of the entire family...). Ohh, he is 4 months old, I just started the account with 50k and just maximize in just under 12 months. Anyways good luck

-bix

Aren't you concerned with what happens if he ends up the only child in the family and decides not to go to college or can't use the total amount, I know college costs will go up, but what if it's too much?

Great question. The money can be transferred to an IRA or if you are over the age of 67 you can pull it as a regular IRA. PLUS you could also use it yourself. Since I'm doing my Phd I could use it AND in a pinch you give it over as a scholorship.

Anyways good luck

-bix

 

[ipoplaya_IHB]

Yep! I do the same with Fidelity's card. I do not have children, but one account is going to my nephew (the only child of the entire family...). Ohh, he is 4 months old, I just started the account with 50k and just maximize in just under 12 months. Anyways good luck

-bix

Aren't you concerned with what happens if he ends up the only child in the family and decides not to go to college or can't use the total amount, I know college costs will go up, but what if it's too much?

Remember, the 529 account is owned by the account holder, not the potential student beneficiary. You can change beneficiaries, take the money back to buy a boat, etc.

 

[tmare_IHB]

Yep! I do the same with Fidelity's card. I do not have children, but one account is going to my nephew (the only child of the entire family...). Ohh, he is 4 months old, I just started the account with 50k and just maximize in just under 12 months. Anyways good luck

-bix

Aren't you concerned with what happens if he ends up the only child in the family and decides not to go to college or can't use the total amount, I know college costs will go up, but what if it's too much?

Remember, the 529 account is owned by the account holder, not the potential student beneficiary. You can change beneficiaries, take the money back to buy a boat, etc.

I was under the impression (no, I was told by the man who opened this account for me at the bank), that if the money wasn't used for someone's qualifying education expenses, it would all be taxable.

 

[ipoplaya_IHB]

I was under the impression (no, I was told by the man who opened this account for me at the bank), that if the money wasn't used for someone's qualifying education expenses, it would all be taxable.

The gains would be taxable if not used for qualifying education expenses, not the contributions. Contributions made with after-tax dollars don't get re-taxed, just the return they produced does. Using those funds down the line for non-education expenses is similar to putting the money into a savings account and deferring taxes on the earnings until way later.

 

[tmare_IHB]

Thanks for all of the responses, I feel better about continuing the same path. Wouldn't mind seeing some gains soon though.

 

[ipoplaya_IHB]

All this talk about 529's reminded me that it is almost time to make the annual $2K contribution to the Coverdell IRAs as well... Sadly the one I established in 2004 for my oldest is worth $9,990 today and I have contributed $10K so far.

 

[tmare_IHB]

All this talk about 529's reminded me that it is almost time to make the annual $2K contribution to the Coverdell IRAs as well... Sadly the one I established in 2004 for my oldest is worth $9,990 today and I have contributed $10K so far.

I'm right there with 'ya, it is sad.

 

[awgee_IHB]

All this talk about 529's reminded me that it is almost time to make the annual $2K contribution to the Coverdell IRAs as well... Sadly the one I established in 2004 for my oldest is worth $9,990 today and I have contributed $10K so far.

I'm right there with 'ya, it is sad.

Yup

 

[biscuitninja_IHB]

All this talk about 529's reminded me that it is almost time to make the annual $2K contribution to the Coverdell IRAs as well... Sadly the one I established in 2004 for my oldest is worth $9,990 today and I have contributed $10K so far.

I'm right there with 'ya, it is sad.

I went SUPER stable with my 529's So far i'm +2.5% woot! Big Money!!!

:lol:

-bix