Quick question. I've heard to not put the account in your kids names, but your own name. And that will give you better flexibility over how to spend the money if the kid doesn't pursue higher education or doesn't need all the money.

Is this correct?

I've been told it doesn't matter because you can change it later to another kid or grandkid even.

When I did it, the Utah plan was managed by vanguard. Worked out well for us. Got the credit card that does your cashback into the 529, too. Both mine graduated A&M debt free. Word of advice from my adviser was, unless the kids are in a dorm and on a meal plan, don't use the 529 funds for housing. The IRS pays attention to that - or at least they were.

Saltwater Assassin said:

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this might be a dumb question; but I'm having a hard time deciding between the 529 & the UGMA/UTMA accounts for my son. For background he is 5 years old. I am going to start it with a lump sum (30-50k).

What are yalls opinions on the 529 over the utma accounts? FTR I'm leaning towards the UGMA account simply for the freedom of use over the restrictions of the 529 plan.

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I do both. I've gotten the 529 plans to a place where there is almost no way I won't use it all for tuition and fees and some room and board. There's a good chance the funds will run out in the 3rd/4th year of my second kid's college. That's where the UTMA comes in.

It's next to impossible to do well and most I know overfund and that gives them comfort that they won't be dipping unexpectedly into their savings to pay for college or going the loan route. I get that desire and frankly it makes a lot of sense. For me, I felt like the inflexibility of 529 coupled with the fact that my kids will live off campus after year one made it easier for me cap my 529 savings and move to UTMA.

My definition of inflexibility is mostly around capping off-campus room and board based on what the university financial aid office says it is. You can look at a school's financial aid website to get a feel but an example is living off campus for fall/spring 2022/2023 in BCS would allow you to use $11.5K of your 529 plan for housing and meals or ~$1250/mo (9mo). Depending on if they carry a full load in summer school or work or whatever, that might be an area where 529 could not be used at all to help with rent and food for those 3 months.
https://financialaid.tamu.edu/Undergraduate/Cost-of-Attendance#0-CollegeStationUndergraduate

One other nice thing about UTMA is is has been an excellent lab to teach my kids about investing and budgeting which isn't done in any form in their high school.

I have a newborn and am wanting to look into starting a 529 for her. Where do you even begin your search? And I assume you can choose another state's plan while living in Texas and attending school in Texas?

I'd also like the option/ability to use some of the funds towards private elementary/grade school just in case, as at this rate I am pretty sure I will want my kids in private school and costs are only going up. Any information or knowledge you can drop on me would be greatly appreciated.

txaggie_08 said:

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I have a newborn and am wanting to look into starting a 529 for her. Where do you even begin your search? And I assume you can choose another state's plan while living in Texas and attending school in Texas?

I'd also like the option/ability to use some of the funds towards private elementary/grade school just in case, as at this rate I am pretty sure I will want my kids in private school and costs are only going up. Any information or knowledge you can drop on me would be greatly appreciated.

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I word-for-word was about to post this for our first who is 8 days old. Thanks and look forward to hearing any advice. I remember reading something about people liking a Utah one but don't remember specifics.

dp

BigfootYancey said:

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txaggie_08 said:

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I have a newborn and am wanting to look into starting a 529 for her. Where do you even begin your search? And I assume you can choose another state's plan while living in Texas and attending school in Texas?

I'd also like the option/ability to use some of the funds towards private elementary/grade school just in case, as at this rate I am pretty sure I will want my kids in private school and costs are only going up. Any information or knowledge you can drop on me would be greatly appreciated.

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I word-for-word was about to post this for our first who is 8 days old. Thanks and look forward to hearing any advice. I remember reading something about people liking a Utah one but don't remember specifics.

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compare the plans on this site, you'll get more info than you need: Saving For College

I use NYC's plan and have been happy with it. There are plenty of good choices.

I don't see a huge benefit of using 529 funds for private school, especially early school, because it doesn't give you investment time to grow tax free. I guess it could make sense for high school if you've been fortunate enough to overfund it.

I think it years past it was Utah and don't look back, but there are more good options out there now. Diggity's post was good, I used that site and a referenced a couple others. It came down to a handful of states for me and I think I would have been happy with any of those top few.

You mean 30,000? $300 for 18 yrs with no additional funds added would require about a 34% rate of return

Each state has its own plan. There may be tax benefits of choosing your home state if your home state has an income tax. Since Texas doesn't have a state income tax, your basically free to choose any state you wish.

I chose a state with vanguard because I like them as my brokerage firm.

Make sure you choose a plan that has low fees. If you have a preference for a brokerage firm (vanguard, fidelity, etc…) chose that.

The biggest two factors are: 1) time allowed to compound, so start now and 2) amount you can contribute. If you have a limp sum of mo ey to do now then do that, but put down what you can the add to it as you can. Might let grandparents know as they may want to contribute as well.

Get a compounding interest calculator and play with it and see what you might have in 18 (or whatever the case is) given a variety of interest rates

The only factors in the calculation are: initial investment, regular contributions, time and interest rate. Make sure you are doing enough and. It too much or too little

BigfootYancey said:

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txaggie_08 said:

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I have a newborn and am wanting to look into starting a 529 for her. Where do you even begin your search? And I assume you can choose another state's plan while living in Texas and attending school in Texas?

I'd also like the option/ability to use some of the funds towards private elementary/grade school just in case, as at this rate I am pretty sure I will want my kids in private school and costs are only going up. Any information or knowledge you can drop on me would be greatly appreciated.

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I word-for-word was about to post this for our first who is 8 days old. Thanks and look forward to hearing any advice. I remember reading something about people liking a Utah one but don't remember specifics.

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I chose NY, but Utah is fine, just don't wait 6 years to get started because you are checking. Currently, now is a great time to get started if you have cash.
Also, as mentioned above, time is one of the factors, so not sure grade school is worth it.

Everyone has their own opinion on private schools. When we last moved, we were looking strongly at some private schools, but the recommendation to just buy in the best community is what we chose and I'm glad we did. IF you can find a generally conservative upper middle class neighborhood, the schools will be fine. They won't be perfect, but neither are the private schools. I'm glad we put the money into the house & neighborhood instead of a private school. Not everyone has that option, I know, and everyone's situation and budget is different. Just something to consider.

Also, just to add, be sure to be putting money into your retirement and then do the 529 or college fund.

And I think it is worth having the conversation with your spouse on what you believe is appropriate to save for college and what approximately you want your son/daughter to save and pay for. I knew I had to pay for half. I also know my job gave me tuition benefits for my kids. For our first two, we've probably only paid $4000 or so total because of their scholarships. Everyone's situation is going to be different, so have the conversation with the spouse, and just make sure to put money towards your retirement first.

sbs said:

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Iowa which is managed by Vanguard

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Looks like Vandguard is thru Nevada now. Do they move these things around?

I see where they also offer thru NY and CO

https://investor.vanguard.com/accounts-plans/529-plans?cmpgn=RIG:PS:XXX:529:07012021:GS


Do you sign up thru the state or thru Vandguard?

I did put both kids through A&M with no student loans but If i was doing it again now, I would put monthly contributions this way from their birth.

30% in S&P Index fund.
25% in JEPI
25% in JEPQ
10% in TESLA
10% in FSELX (Fid semi fund)

Put $6,500 annually in IRA.

And leave it alone.

OldArmyCT said:

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As a retired FA I can tell you if you're living in Texas it makes absolutely no difference whether you set up a Utah plan or a Kentucky plan or any other state, the only thing that makes you any money is what you invest that money in. If you want American Funds you have to have an advisor and while they have low maintenance fees they do have sales charges on the front end. Growth Fund of America is historically one of the best funds in America though. The majority of people I saw wanting a 529 I directed to either Fidelity or Vanguard and told them to open the account themselves and pick an Index fund. The majority of people who invest on their own use these two firms for their funds anyway, why do differently for your kids? Mutual funds are your only 529 choices, no individual stock accounts allowed.

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Apparently wells Fargo has some mutual fund they set up, not thru a state for their 529 plans but it costs like 5% upfront then no cost ever again, it's just the initial money that's charged.

So of you put in 10K, they charge $500 upfront but that money isn't charged again

Does that make any sense?

I signed up through the state. That was over 20 years ago. Very happy with the Iowa plan.

Another vote for Utah.
$350 a month per kid staring once they get their social security card in the mail. My son has enough in his for his first 2-2.5 years of college as a 8 year old. Talk about a good feeling seeing that amount grow. Love the "set it and forget" ease of the 529.

Sal****er Assassin said:

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this might be a dumb question; but I'm having a hard time deciding between the 529 & the UGMA/UTMA accounts for my son. For background he is 5 years old. I am going to start it with a lump sum (30-50k).

What are yalls opinions on the 529 over the utma accounts? FTR I'm leaning towards the UGMA account simply for the freedom of use over the restrictions of the 529 plan.

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I decided to do both for our baby. Contribute $200/mo to 529 and $50/mo to UTMA.

If your kid knows about the UGMA, he can ask for that money at 18. W/529, you can keep control until age 30 I believe, and even use it in an emergency for yourself.

12thMan9 said:

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If your kid knows about the UGMA, he can ask for that money at 18. W/529, you can keep control until age 30 I believe, and even use it in an emergency for yourself.

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Yea I personally wouldn't lump sum that much personally into the UTMA/UGMA accounts. Especially if they're just 5. Grow that money if you want in a taxable account somewhere else and make the decision later on closer to 18 about gifting and purpose.

At 18 I would have not been wise with some huge amount of money suddenly sprung upon me. Heck, I had a full year in HS where I was 18! A 529 would have been (and was) much more prudent.

AGGIE WH08P said:

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Another vote for Utah.
$350 a month per kid staring once they get their social security card in the mail. My son has enough in his for his first 2-2.5 years of college as a 8 year old. Talk about a good feeling seeing that amount grow. Love the "set it and forget" ease of the 529.

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$350 seems steep, you gunning for private school? My math showed me about $250/month. Just curious on your method!

Anyone heard of a 529 like my FA at Wells Fargo has access to which is basically him buying mutual funds at a 5% charge upfront but then no charge on that money again after the upfront 5% charge?

I think I got that right


I already have a taxable account thru him but was asking what he had as far a 529 and that'd what he described


Or should I just go thru a state like Utah?

I asked my FA about since I assume it would roll into my taxes real easy like the taxable account thru WF does

Dill-Ag13 said:

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AGGIE WH08P said:

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Another vote for Utah.
$350 a month per kid staring once they get their social security card in the mail. My son has enough in his for his first 2-2.5 years of college as a 8 year old. Talk about a good feeling seeing that amount grow. Love the "set it and forget" ease of the 529.

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$350 seems steep, you gunning for private school? My math showed me about $250/month. Just curious on your method!

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$350 is not steep.

23 years ago when i set it up, we calculated $133,000 for total state undergrad for my daughter HS c/o of 2017 with $300 per month. When she started college, she had $105,000 in the account but her 529 kept growing and we paid the entire undergrad with her account with some money left over.

Private school would have been double and we knew she wouldn't get any need based financial aid.

I am putting $500/month for my 3-year old. Maybe I need to reevaluate.

AggieDruggist89 said:

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Dill-Ag13 said:

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AGGIE WH08P said:

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Another vote for Utah.
$350 a month per kid staring once they get their social security card in the mail. My son has enough in his for his first 2-2.5 years of college as a 8 year old. Talk about a good feeling seeing that amount grow. Love the "set it and forget" ease of the 529.

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$350 seems steep, you gunning for private school? My math showed me about $250/month. Just curious on your method!

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$350 is not steep.

23 years ago when i set it up, we calculated $133,000 for total state undergrad for my daughter HS c/o of 2017 with $300 per month. When she started college, she had $105,000 in the account but her 529 kept growing and we paid the entire undergrad with her account with some money left over.

Private school would have been double and we knew she wouldn't get any need based financial aid.

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First, in general, most will get aid, in the form of scholarships or grants, at private schools. They realize it's more expensive and accommodate accordingly. At least the Baylor's, etc.; probably not as much so at the Rice's of the world.

Second, I'd also agree that $350 seems steep. I know everyone is different, but my plan isn't really for my 529 to pay for 100% of my kid's school. That extra also isn't just being spent, it's going into other savings tools that have more flexibility and could just as easily be used for school. Also, I don't really foresee paying for some out of pocket to be a problem if need be. And finally, I'm still debating having my kid getting student loans to understand debt, even if I do pay the loans off for them later.

I'd rather any of those scenarios than be sitting on $105k and my kid decide they don't want to go to college.

My math said $250/month for 80% coverage which I guess is about $315/month for full coverage. Have family members who gift so it averaged down to $220/month for me. I have a spreadsheet. We are on track to pay about 80% of A&M as of now with a 6 year old and a 4 year old

I've been doing 500. Age 10 and 7 now. No one knows what college will cost 18 years after birth. Figured I'd load up early and dial it back older they get.

No one invested in the Texas College Savings Plan?

If so why not?

Is it because these are the only funds available?

JFrench said:

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I've been doing 500. Age 10 and 7 now. No one knows what college will cost 18 years after birth. Figured I'd load up early and dial it back older they get.

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That's obviously fine as long as you can comfortably afford it. I guess I look at it as 1) the 529 can be a supplement, and 2) (and reason for 1) what if my kid decided not to go to college or college costs change (as in government steps in).

2 questions for the forum:

1) Which do you choose b/t Vanguard and USAA (now managed by Victory Capital)?

2) You have to do by student name? You can't just have a 529 that you can draw from for any of your kids?

RGRAg1/75 said:

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2 questions for the forum:

1) Which do you choose b/t Vanguard and USAA (now managed by Victory Capital)?

2) You have to do by student name? You can't just have a 529 that you can draw from for any of your kids?

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2) You have to name a participant but can change it once per year.