529 accounts

[Mark R]

Have any of you used 529 accounts to help a child’s or grandchild’s eduction? How do the work was it a do it yourself deal or did u go through a broker?

[ChuckD]

Yes.
You don't need a broker.
I recommend - my529.org

[vtec]

I highly recommend! We stuck in as much as we could for many years up to and while they were in school. I would have to check the numbers but three kids and it was pretty sure more than doubling our contribution, with state tax incentives to go with. It made it really easy to cover the costs of whatever school they chose. Get started when they are really young and the interest on your money should be really good!

I had 529's for both kids and now have them for both grandkids.

In this state, if you use the state program, you get a 20% state tax credit for donations up to $5,000/year. In other words, you get a $1,000 tax CREDIT, not deduction, if you contribute $5K to a 529.

529 accounts are great for saving for college or vocational schools. A broker is not necessary in this state; its called College Choice 529, easy to open online. I suspect your state has something similar.

[tonto]

I went with a broker and had it invested in different funds. The broker set it up for the state of Alaska because for tax reasons.

[lakewood]

Yes, started with both my daughters when they were young and quit contributing when they hit their Senior year of high school. I did go thru an investment representative. Both of them have Bachelor degrees in Nursing and no student loans. They work great. Now they are in Masters programs and that cost is on them, but they are able to work and take classes at same time.

[Bigtaproot]

I’ve heard they are A very good idea if you have children that have college ambitions. Fortunately or unfortunately, I raised one mechanic. One janitor. And one housekeeper so not really applicable in my case

[mcbreth]

We set up a 529 through our financial advisor when my son was born. It is invested in CO’s fund and has done really well. We contribute $100/mo and there is real money in there now....

[JSev1]

Get them going early as possible (birth if you can swing it), and like any other automatic withdrawal investment, you quickly adjust your spending habits and soon don't realize you're saving. The tax deductions are great as mentioned.

Also, if you have more than one kid you are saving for, do not worry that one kid goes to college, while another maybe decides a different path. You can easily and without penalty transfer funds between each kid's 529 accounts. Note that things like trade schools qualify as well (not just college tuition).

[MikeG1]

Agree with everything That has been posted. This may, 1 month from now, the last of 3 my girls will graduate. We were able to pay it all through 529’s. Start with aggressive funds and taper to more conservative as they age. Some funds have a “target” feature which rebalance the accounts automatically.

The key for us was disciplined contributions. Look for funds with low costs. We prefer, Vanguard...low costs, many investment options. You do nothing after it’s set up if you have automatic contributions through your paycheck. We paid 12 straight years, 24 straight semesters, because out kids are 4 years apart.

Don’t forget, Roth IRAs can be used similarly, but make sure you differentiate college vs retirement money or you’ll give the college your retirement. It’s tough. Stay disciplined. Your kids may not appreciate the sacrifice now, but they will be eternally grateful after graduation with little if any loans.

Pm me if I can assist. Mike