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I'm wondering how much folks here have in their 529 plans and how many years before they're expecting to tap into it. I'm not sure if most parents consider a 529 plan given the great benefits (at least in VA) or if they opt out.
I'm 34 and we have about 39k in our 529 accounts, will be tapping into it in about 16 years.
At some i think i'll need to reduce the monthly contributions....or i'll end up with too much in there, considering i will not be paying for out of state tuition for the kids. No thank you! (we have too many good enough schools in Virginia i think).
We are both 36 with 2 toddlers and zero in 529. We live in GA and the state gives a tax credit up to $120 for $2000 contribution into 529s. I looked at the plan years back but decided not to go that route for two reasons:
1. the investment choices of 529 are relatively limited
2. The tax benefit upon distribution is a non factor for us. My parents, non US citizens, wanted to give us some money years back. I asked them to keep it in a brokerage account under their names so the money is not taxed for capital gains.
However, to OP, since you are in VA, have you thought about taking a job in DC? I remember it allows a lumpsum contribution with full state tax credit. When Obama did the contribution, I personally think that may be the reason.
We are both 36 with 2 toddlers and zero in 529. We live in GA and the state gives a tax credit up to $120 for $2000 contribution into 529s. I looked at the plan years back but decided not to go that route for two reasons:
1. the investment choices of 529 are relatively limited
2. The tax benefit upon distribution is a non factor for us. My parents, non US citizens, wanted to give us some money years back. I asked them to keep it in a brokerage account under their names so the money is not taxed for capital gains.
However, to OP, since you are in VA, have you thought about taking a job in DC? I remember it allows a lumpsum contribution with full state tax credit. When Obama did the contribution, I personally think that may be the reason.
OP here.
Our tax credit in VA is pretty good i think. You can deduce up to 4000 PER ACCOUNT PER YEAR. and you can have as many accounts as you want! (i have 10 or so i think) Each account has to invest in a unique fund though.
last year we we had a 9000 state tax deduction i think....this year will be more.
I haven't considered a job in DC. too far ....plus, i don't really want to invest a lump sum at this point.....
Quote:
Originally Posted by Mr. Zero
I'd be interested in hearing which plans posters selected and why. Is everyone just picking their state plan?
We're in California, but I don't believe there are any state tax benefits here. We haven't found any other plans that we like either.
In VA, we have an "INvest" option...where you just choose from mutual funds for each of the accounts you have for as many beneficiaries as you want. They're broken down to like "aggressive investing", "real estate", "Moderate", etc.
I did have the option of paying 50k two years ago in order to secure a 4 year college for each kid in Virginia 18 years from then. We didn't do it.
Our son is almost 3 and we have about $46k in his 529. We put in $26k when he was born and average about $6k in contributions each year.
wow, that's pretty good! considering it's just for one child!
Based on my calculations and a 7% average rate of return, you'll have close to 277k by the time he's ready for college.....may be a bit too much...no?
(unless you're going to have more kids...or you want him to go to a 70k a year school)
Our tax credit in VA is pretty good i think. You can deduce up to 4000 PER ACCOUNT PER YEAR. and you can have as many accounts as you want! (i have 10 or so i think) Each account has to invest in a unique fund though.
last year we we had a 9000 state tax deduction i think....this year will be more.
I haven't considered a job in DC. too far ....plus, i don't really want to invest a lump sum at this point.....
In VA, we have an "INvest" option...where you just choose from mutual funds for each of the accounts you have for as many beneficiaries as you want. They're broken down to like "aggressive investing", "real estate", "Moderate", etc.
I did have the option of paying 50k two years ago in order to secure a 4 year college for each kid in Virginia 18 years from then. We didn't do it.
I think functionally the deduction is limited in that say you have two children, to deduct the max of 16k in a single year you need one parent to have 529s for both children and the other parent to have the same. 4 accounts, 4k contributions gets you there. You can't write off an unlimited amount per year although there is a carry forward provision
wow, that's pretty good! considering it's just for one child!
Based on my calculations and a 7% average rate of return, you'll have close to 277k by the time he's ready for college.....may be a bit too much...no?
(unless you're going to have more kids...or you want him to go to a 70k a year school)
Have you seen the tuition projections for 2030?
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(we have too many good enough schools in Virginia i think).
....plus, i don't really want to invest a lump sum at this point.....
