Comments on: College Savings Plans – 529 Savings Plan

By: Patrick

Patrick — Sun, 29 Mar 2009 19:11:44 +0000

Janis: Yes you can – there are no age requirements for withdrawal from a 529 plan.

By: Janis

Janis — Sun, 29 Mar 2009 15:33:52 +0000

Can you save the funds in the 529 plan for education expenses for your child older than 18?

By: Patrick

Patrick — Thu, 12 Mar 2009 01:50:12 +0000

Kristy: I agree, the ability to use them for yourself (or later transfer them to another family member) makes 529 plans a very attractive option. It also means you can start one now, save money indefinitely, then transfer the funds to your children should you have them later in life.

By: Jeff Rose

Jeff Rose — Wed, 11 Mar 2009 20:50:37 +0000

@ Neal

Just an FYI, the IRS just changed adapted the rule where you can change 529 plan investment options twice a year in 2009. As of right now its just good for ‘09, but I imagine it will stick for good, but we’ll see….

By: Kristy @ Master Your Card

Kristy @ Master Your Card — Tue, 10 Mar 2009 05:19:15 +0000

You know, as long as I’ve been in finance, I didn’t realize 529s could be applied to yourself. I think this would be a great option to help sock money away for graduate school for myself. I don’t have kids right now, so it’s my education I’m thinking of and I don’t want any more loans! It’s going to be interesting paying those back as it is.

At any rate, now that I know I can use them on myself, I might just look into this a bit more. Thanks for sharing!

By: Squawkfox

Squawkfox — Mon, 09 Mar 2009 15:40:57 +0000

Congratulations Patrick! In Canada our education plans are called RESPs – and they are a fabulous way to sock savings away for a child’s education. Watching rules, reading fine print, and minding FEES are essential. Sounds like you have everything figured out!

By: Patrick

Patrick — Mon, 09 Mar 2009 14:58:21 +0000

Neal: Thanks! My wife and I are excited about becoming parents! We are opening our 529 accounts in OH, which offers a wide variety of Vanguard investment options and bank CDs. So we have low expense ratios and several options to choose from.

Frank: We haven’t decided to transfer any of the money at this time, we have only opened the 529 accounts with the minimum amount to get them started. I don’t know if there are any tax benefits to moving the money over, and it might not be the best move overall when you take financial aid into consideration. For now we plan on leaving the money in our own accounts – we’ll cross transferring the money when we get closer to that time. Or in about 18 years or so.

By: Frank

Frank — Mon, 09 Mar 2009 14:31:28 +0000

Why would you want to transfer the 529 into your baby’s name? Are there tax benefits I’m missing? I can think of a few possible drawbacks, including making financial harder to get and an irresponsible 18 year old spending it in a way you don’t intend.

By: Neal Frankle

Neal Frankle — Mon, 09 Mar 2009 14:16:19 +0000

First, many congratulations to you and your wife.

I think that the 529 is a great plan for your child. The only drawback – and its not large enough to overcome the benefits -is that your investment options are limited. You can usually only change your investment selections once/year.

I suggest you look for a plan with as many options as possible and one with low costs.

Again, congratulations – you’ll love being a dad.