Way OT - 529 Educational savings plans

Anyone ever started these for your grandkids?
I was thinking of starting them for the younger bunch of mine.
No, it won't be a Christmas gift for the grandkids.
I'm thinking about the kind where someone starts it and then
anyone and everyone can contribute if and when they wish
over the years until the child is of age to use it.
Not the pre-pay by semester/year type plan.
Any of them are transferable in case the kid doesn't go to college.
Some of you probably have experience or at least thoughts?

not an expert but:

you start one in state of your choice

you can put money in but over $14k per year might require gift tax return, grandparents can put up to 5 years worth in but then have to wait till year #6 to do more

unused money can be used by siblings for college

"you start one in state of your choice"
I think but verify before opening account.
Choose a plan from any state you want and you do not have to attend school in that state either.

I heard Utah has a good plan. If your child does not go for additional schooling (trade or college)you can take the money out but you will pay income tax.

Also take a look at starting a Roth IRA for them. They"re similar, but I think a Roth is often better:

1) They can use it to pay for college, same as a 529 (but it"s best to borrow for college and pay back from the Roth after graduation)
2) If they decide not to go to college it"s still a good IRA or savings for a house
3) When they apply for financial aid I believe the 529 counts as an asset (works against you) but the Roth is considered retirement savings and doesn"t count as a asset.

Disclaimer: This advice is worth exactly what you paid for it.

I have them for my kids, and a Roth IRA is also a good idea.

You have to have earned income for a Roth. Go to Clark Howard.com. He will have a list of good plans and the ones that charge too much for fees.

Like one of the other fellows posted I prefer the Roth IRAs over the 529 plans. If you put much into the 529 plans then the beneficiary/child has to count them as an asset when applying for grants and financial aid. So I would only do the 529 plans if your going to be putting enough in to fully cover the cost of college. If you are doing less than that you can seriously limit the the college the beneficiary/child can go to without any financial aid.

Also check and see what plans your state has for college plans. The prepaid credit hour plans are not a bad plan either and they are inflation protected. Meaning once you buy a credit hour you have that paid for regardless what they cost when used. Yes it limits the child to a college in the state but they still work well for smaller amounts of giving.

I have done both the IRAs and Prepaid plans. The IRAs in my later years as I had more to give, mainly grand kids. I used the prepaid credit hour plan for my kids. When I started out each credit hour only cost $35. So smaller amounts of money would do something.

Don't buy into the BUNK about how the prepaid plans "limit" the child's educational opportunities. Just about every state has some good colleges. The colleges don't like the prepaid plans as they do not get to inflate their credit hour cost.

I know it makes me evil and a bad parent, but my kids will
be going to college the same way I went to tech school. On
their own! Having someone pay for their schooling causes
a child to not appreciate it in much the same way as if they
are bought cars or anything else. If they don't earn it
themselves, the education means nothing. See too many
kids these days with expensive degrees still mooching and
working at Hot Topic. Don't get me started on the
overvaluation of a college degree.

I don't totally disagree with you Sprint, but times have changed.
When I went to school, I could get a job without a degree, heck
I could get one without even a high school diploma.
Now you're lucky to get into McDonald's without at least a diploma.
How can you get a job and pay your way if you can't get the job?
I'm not offering to pay their way, I need a vacation too.
I'm only thinking of helping and setting up a way for others to help.

Can you start a Roth for someone else who does not have an income? Never heard of that.

What really burns me is that most of the jobs I see posted
require a degree, but from what the job description is one
would not be needed. How is that helping anyone? It
makes no sense to have a $200K degree to work a $35K a
year job. Most of these jobs that need a degree don't care
what the degree is, could be advanced basket weaving.
Requiring college for everything is just an extention of the
"everyone's special" movement.

Married, file jointly,and one of you have W2 that exceeds your contribution might work. What I really like is you can make contributions and if you want you can take the contributions out with out penalty at some future date. You can not take out the gain on the contributions with out penalty. I think a good way for a person to "save up" for a property. No guarantees.

I paid every cent for my BS degree 40 years ago. Vowed not to make my kids do that if at all possible. Oldest didn"t go to college so we bought him a house. Youngest got an engineering degree. Both are very appreciative for what they got. Some of the best money we ever spent!

If you are paying $200,000 for a degree to go into a field that pays $35,000 a year you need your head examined.

As for needing a high school degree to get a menial labor job - I haven't seen much of that. Most employers hiring those people want to know if you own an alarm clock so you'll get up and come to work.

Having someone pay for their schooling causes
a child to not appreciate it in much the same way as if they are bought cars or anything else.


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Have you noticed the same attitude when student loans pay for college? The child has no appreciation for the loan and spend the money as fast as they can get it in their account. Years later they cry about the debt they accumulated and expect someone else to take care of it.

If you figure in all the extras, room, food, car, gas, beer money, I would expect the tab would approach $200K. Then figure in they get a teaching degree, ever see what those jobs pay? Not enough to justify the expense or time involved. My brother had almost $100K in his degree 10 years ago just for the credit hours, nothing else figured in. He does not even work a job using his degree, not that he has not tried. There is not much out there for a college degree. I think a lot of these kids will be sorely disappointed when the high pay do nothing job like on TV is not there.

(quoted from post at 22:30:03 12/02/13) If you figure in all the extras, room, food, car, gas, beer money, I would expect the tab would approach $200K. Then figure in they get a teaching degree, ever see what those jobs pay? Not enough to justify the expense or time involved. My brother had almost $100K in his degree 10 years ago just for the credit hours, nothing else figured in. He does not even work a job using his degree, not that he has not tried. There is not much out there for a college degree. I think a lot of these kids will be sorely disappointed when the high pay do nothing job like on TV is not there.

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You are figuring in "all the extras" to come up with 200k, if you didn't attend college for these four years wouldn't you still be spending money on room, food, car, gas, and beer money? I don't think you can count these realistically since these are just cost of living items whether you attend college or not.

Yes college is expensive and yes I've seen people spend way too much money getting a degree in a field that doesn't pay much but many people make far more with a degree than they would have without one. A degree just increases your odds at a successful career.

Many employers require a degree, even one not related to their field work because it shows you are willing to put forth the work to attain a degree.