Comments on: Introduction to 529 Education Plans

By: Lazy Man and Money

Lazy Man and Money — Thu, 12 Jul 2007 01:48:04 +0000

I’m looking into this for my nephew. I like to think that I’m financially savvy, but it’s just far too complex – especially with all the other college savings plans out there (Coverdells and the like).

By: Patrick

Patrick — Fri, 06 Jul 2007 19:20:49 +0000

Man, that stinks that we can’t fund these 529’s before a child is born. If enough representatives believe life begins at conception…then shouldn’t a 529, as well?

Go figure.

By: broknowrchlatr

broknowrchlatr — Thu, 05 Jul 2007 18:39:52 +0000

“The tax benefits of participating in a 529 plan are decent but not incredible”

I’d lean more toward incredible. Compare a buy and hold strategy (call it Plan A) versus this (Plan B). Say you have $10k to save for college, 10 years to invest it and have federal and state income taxes totalling 30%. Lets also use the unreliable 10% return. For plan A to contribute $10k, a person has to have $14,286 in pretax money. So, Plan B already has a comfortable lead. At 10% interest, these grow to $25,937 and $37,053. The optimal tax option for Plan A is to buy and hold, only havign to pay capital gains tax. Plan A can really invest in anything. After capital gains on the return as it is paid out, Plan A ends up with $23,547 to pay for college expenses. Plan B ends up with over 50% more. I’d call that a substancial benefit.

In my state there is no prepaid college plan. But, at first glance, the returns will be similar and the investmenat plan gives you more options, including not going to college at all.

By: jim

jim — Tue, 03 Jul 2007 12:46:39 +0000

I’m going to take a look a closer, more in-depth at the two programs sometime in the future, right now I have no idea.

By: SAHM-CFO

SAHM-CFO — Tue, 03 Jul 2007 12:28:18 +0000

Any comment as to which is better for the MD plan? The prepaid or the T Rowe acct?

By: My Financial Mistakes

My Financial Mistakes — Tue, 03 Jul 2007 02:45:45 +0000

The plan may not be the best college education plan but it is better than no plan at all. Other alternatives, student loans for the kids or home equity line of credit. Definitely not the parent’s retirement plan…

By: jim

jim — Mon, 02 Jul 2007 19:06:12 +0000

Ha NO.

By: Mike

Mike — Mon, 02 Jul 2007 18:56:04 +0000

Congats on the new addition to your family!

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