View Full Version : HELP! Trying to start a 529 plan
11-28-2006, 08:42 PM
I feel like such a bad mom. Anyway, originally DH was suppose to start a 529 plan for DS before he turned one. Well DS is now 3 1/2 years old and we also have a 9 1/2 month old DD. I tried to look at the archives but I just can't seem to use. I was wondering if someone had any advice regarding 529 plans. Which plans do you have and what is good about them. We are living in MD but aren't necessarily looking to have one for MD. For reasons of "independence" we can't really establish our 529s under our name so the tax benefits aren't really necessary. So now I have so many to choose from but don't know where to start or how. Did you use a financial consultant? I really want to do this before the year end. It's one of those things that has been bothering me for the past 3 years and now I've just given up on DH doing it. Thanks so much in advance once again. BBB is such a great bulletin and great community.
11-28-2006, 09:00 PM
I work with a financial advisor and the best no sales charge plans out there are the Vanguard Plan and the Fidelity plan. Fidelity is based in Delaware, can't remember the state for Vanguard of the top of my head. These plans will not charge you a percentage to invest, like some other plans out there. Most plans sold through a financial advisor are ones that charge a percentage off the top of your purchase, usually about 5%, so you would "lose" $5 out of every $100 you save. These two plans have the most four and five star rated funds, as rated by Morningstar. I could start getting technical here and go on and on, but check out those plans.
11-28-2006, 09:03 PM
A local consumer reporter that has a nationally syndicated radio show has a section on 529 plans on his site. The link is below. I used it to help me decide which 529 to use for my twins.
11-28-2006, 09:06 PM
We have the Iowa plan, even though we don't live there. It has no annual fees, low fund fees and a quite low minimum investment. Those are the big things to look for. I think the underlying funds are Vanguard which is known for the low fees. It is also a Upromise plan, so we have automatic transfers from our Upromise account.
I'm not sure why you can't put the 529's under your name? That is one of the biggest benefits of those plans, that you control the money so they don't go buying a Porche on their 18th b-day. Also, if the plan is in your name, it is considered a parental asset for financial aid, not a student asset. That means it is factored in much less.
11-28-2006, 09:08 PM
Check out www.savingforcollege.com. It's a great site and you can directly compare plans to find one that is best for you.
If you are not looking for tax advantages make sure to check out the enrollment, maintenance and program management fees and expenses.
These can widely vary.
11-28-2006, 09:34 PM
I'm also in MD, and have the paperwork in my desk to start ours-I am probably going to go with the MD plan, administered by T. Rowe Price. I haven't researched extensively, and we will get a tax benefit, but it seems like a good plan-
Emily mom of Charlie born 11/02 and Zoe born 9/05
11-28-2006, 09:37 PM
The reason why we can't put it under our names is because my DH works for one of the big accounting firms in management and therefore we can't invest in most of the funds that are clients of the company. Which really sucks. When I called the I found out that I could have my Mom start it for us and we can put the money in there.
I'll definitely look into the Vanguard and Fidelity funds. Thanks so much.
11-28-2006, 09:51 PM
We have the Nevada plan, though we've never even visited there. It has some of the lowest fees and is administered through Vanguard. My husband researched the various options online and set it up on his own. If your DH works in accounting I'm sure he'd be able to do this without difficulty.
11-28-2006, 09:55 PM
I wish he would be able to help me on this. It's kinda funny b/c even though he works for an accounting firm, he actually doesn't do accounting work in the traditional sense. He has more of a law background. I do all our financials (ie bills, savings, investments, tax returns, etc).
At least right now I have a place to start which I'm happy to do the research. It's just so confusing sometimes because there are so many choices out there.
11-29-2006, 08:01 AM
Ahhh! Makes sense. I would definately have your Mom do it then if she is willing. She may want to talk to her financial advisor to make sure it wouldn't impact any of her plans.
It was a big scary step, but since you can change plans yearly, I figured if I got in and found it sucked for some reason, I could switch after a year. I have been very happy with the Iowa plan. Very simple, good statements and decent online access.
I used a financial advisor to set up my DS' 529 plan, which is in Virginia. I would not do that again, actually, because every time I need to change the plan, I need to call her. And she doesn't actually do anything else for us. The good news is that I can move it to another state's plan (probably Illinois's plan, where we live, or USAA's plan, because all of our other accounts are with them) without contacting the financial advisor. I like Illinois's plan because you can put money in in smaller amounts than $50. Yes, I know that the recommendations are that you put in $300 per kid per month, but I just can't afford that!
11-29-2006, 12:10 PM
We have the Iowa plan, too, but we are in Iowa. The Vanguard funds got a good rec when I looked into it, and it is a considerable tax savings for us, so it was a no-brainer.
11-29-2006, 01:40 PM
We have the Washington State prepaid GET plan which is guaranteed through the state of Washington. We basically buy the units for college now and it will be worth the tuition of the highest priced public University in Washington (which will probably be the University of Washington)at the time they are ready to go to school. It can be used at almost any of all the Public/ Private Schools throughout the country. The appeal of this plan for us was that it was guaranteed and that our kids would be guaranteed at least the tuition cost for schools in our state.
Sandy mom to Alexander Thor 3/16/02
& Marisa Mia 4/23/05
11-29-2006, 05:03 PM
We started a 529 plan for Dora. AT least I think Dh did soon after she was born. It was hard to choose which state we wanted the plan from, but I think we ended up going with Utah. I can't remember why but I can ask him for more details when I get home (I'm out of town til next Monday). DH did all the research himself because that's the kind of guy he is. You can pm me if you want more info.
11-29-2006, 07:09 PM
I like that summary! Our state plan (Maine) stinks, so we went with NY for DS. Now I need to get on the stick for the twins!
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