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Hi,
Back in 2005, I started college saving 529 by 2010, my principle is $25K.
After 2010, I stop adding money to it. Long time, I didn't check this account, I just checked today and found I have only gained 3K for past 7 years.
My kids are only on the first grade and second one is at pre-k, I still have long way to go. Just wondering is college saving is a waste. Maybe I should open regular stock market account and buy high paying dividend stock? With college saving account I have , I can't controll any thing, I can only add money, they manage accounts by child age.
Just wondering is college saving is a waste. Maybe I should open regular stock market account and buy high paying dividend stock? With college saving account I have , I can't controll any thing, I can only add money, they manage accounts by child age.
The main advantage of the 529 is that you can't just take money out of it whenever you like. It's in the children's name and locked until they are ready to use for college/trade school/etc. at age 18. This is an advantage for those who might be tempted to tap into it during rough economic times.
Although you can get higher earnings with a stock market account/mutual fund, you have to have enough discipline not to touch it. Easy for some, not so easy for others.
The Other (and any future kid(s)) could use it. You can give to someone else (family member kid), You can pull it out yourself, Pay the Income tax + 10% on the money/
Check out the 529 portfolio performances. You may need to change the portfolio asset allocation. I try to review my kids 529 portfolio every year. Last quarter, I needed to change one of the portfolio from the International to the Treasury. My brokerage companies International portfolio is not doing good and given all the mess happening around the world, I decided not to stick it out.
I have two kids. I do have 2 529 plans. But I think the smarter way to go about saving for both is to max out 1 account, then add to the other account. That means one account will have more than the other but if one kid doesn't go to college, you can use the maxed account for one and won't have as much of a withdrawal for non educational for the 2nd account.
There are a few articles out there for picking a 529k.
I know how you feel. And here it what I did: I rolled my 529 savings into a 529 prepaid plan. I too had about $25,000 and used that to pay for 3 years of tuition. I don't trust the market to outperform the ridiculous increases in tuition. In my state (VA) the increases at UVA/VA tech for the last 2 years have been 9%!!!!!!
My point is that the money HAS to be there for the kids when they turn 18. The prepaid is the only vehicle that can guarantee that, ..the market cannot!!!!
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I got this
