529 options

[Anonymous]

The fund option on the VA529 aren’t as good as what I see on Fidelity’s 529.

Is the VA 4K tax deduction worth sticking with the VA plan?

[Anonymous]

Anonymous wrote:The fund option on the VA529 aren’t as good as what I see on Fidelity’s 529.

Is the VA 4K tax deduction worth sticking with the VA plan?

I would. The American Funds 529 has plenty of good options. In fact, we chose it 15+ years ago and were not in VA, as our financial advisor recommended it as one of the better options.

[Anonymous]

What exactly are you planning on doing with it in the Fidelity account?

A $4000 contribution in the VA529 account gets you $230 back at tax time. Combined with sticking the money in 1-3 of the Index Portfolios depending on your timeframe and risk tolerance and you would be unlikely to do better by putting the money in Fidelity.

[Anonymous]

Anonymous wrote:What exactly are you planning on doing with it in the Fidelity account?

A $4000 contribution in the VA529 account gets you $230 back at tax time. Combined with sticking the money in 1-3 of the Index Portfolios depending on your timeframe and risk tolerance and you would be unlikely to do better by putting the money in Fidelity.

The VA529 total stock market index fund hasn’t appreciated very well over the last few years. The rest of the fund options seem worse.

In fidelity I’ll put it in the sp500 index.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What exactly are you planning on doing with it in the Fidelity account?

A $4000 contribution in the VA529 account gets you $230 back at tax time. Combined with sticking the money in 1-3 of the Index Portfolios depending on your timeframe and risk tolerance and you would be unlikely to do better by putting the money in Fidelity.

The VA529 total stock market index fund hasn’t appreciated very well over the last few years. The rest of the fund options seem worse.

In fidelity I’ll put it in the sp500 index.

What are you talking about? The total stock market index fund has been within 0.01% of the index for the part decade.

[Anonymous]

If you don’t like the VA plan, you can take the extra step of contributing to the VA plan and rolling the money into another plan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What exactly are you planning on doing with it in the Fidelity account?

A $4000 contribution in the VA529 account gets you $230 back at tax time. Combined with sticking the money in 1-3 of the Index Portfolios depending on your timeframe and risk tolerance and you would be unlikely to do better by putting the money in Fidelity.

The VA529 total stock market index fund hasn’t appreciated very well over the last few years. The rest of the fund options seem worse.

In fidelity I’ll put it in the sp500 index.

It’s had similar returns to the sp500. The small differences are due to the total stock market index covering the whole market (so also mid and small caps, not just the sp500). But the difference is not worth giving up a $230 return on $4000 invested, and the total stock market could outperform the sp500 going forward (happens all the time though sp500 has been better recently).

[Anonymous]

Anonymous wrote:

Anonymous wrote:What exactly are you planning on doing with it in the Fidelity account?

A $4000 contribution in the VA529 account gets you $230 back at tax time. Combined with sticking the money in 1-3 of the Index Portfolios depending on your timeframe and risk tolerance and you would be unlikely to do better by putting the money in Fidelity.

The VA529 total stock market index fund hasn’t appreciated very well over the last few years. The rest of the fund options seem worse.

In fidelity I’ll put it in the sp500 index.

You are just wrong on this. Fidelity is fine but the American Funds have performed quite well. You need to look again.

[Anonymous]

Stop the 529s. Learn to invest and you can make 20% several times a year without and rules.

[Anonymous]

Anonymous wrote:Stop the 529s. Learn to invest and you can make 20% several times a year without and rules.

This is a good idea if you want your account to eventually go to zero.

[Anonymous]

Anonymous wrote:Stop the 529s. Learn to invest and you can make 20% several times a year without and rules.

This is such shit advice. Over the long run most investors will not outperform the market. If you're going to spew BS like this, please explain why you believe the efficient market hypothesis is wrong.

[Anonymous]

Anonymous wrote:Stop the 529s. Learn to invest and you can make 20% several times a year without and rules.

Anyone who goes read WSBs knows this is untrue.

[Anonymous]

Anonymous wrote:Stop the 529s. Learn to invest and you can make 20% several times a year without and rules.

This is probably false, but the fact that you don't have to pay any capital gains taxes on 529s means that even if your returns are a bit lower than they are in your taxable account, you're still probably coming out ahead anyway.

[Anonymous]

Anonymous wrote:The fund option on the VA529 aren’t as good as what I see on Fidelity’s 529.

Is the VA 4K tax deduction worth sticking with the VA plan?

Are you new to this? The VA 529 has passive market index funds (Total, Mid cap, aggressive, etc.) as well as target-date funds that you can invest in. Also the limit is $4K per account per parent. There are about 10 funds in the VA plan so at least $40K per beneficiary per parent and you can claim the entire amount as a deduction against state taxes, not to mention the tax-free growth. Of course, there's the annual gift tax limit ($18K/yr. for 2024) to consider.

For my kids, we invest $36K for each kid ($18K per parent) into the 529 and claim a deduction for the entire amount. The state of VA gives me back $2,070 at tax time (5.75% marginal tax rate). Have been doing this for years (lower thresholds for previous years of course).

I'm not sure you get the state tax deduction if you invest in the Fidelity 529 though.

[Anonymous]

Anonymous wrote:Stop the 529s. Learn to invest and you can make 20% several times a year without and rules.

Only 20%? Man, you gettin' gyp'ed!