Which 529 plan do you have your kids in? How much do you contribute per year?

[Anonymous]

VA has plans that you can choose based upon the kid's age - so it is more aggressive in the beginning and then gets more conservative as the child gets closer to college age.

I contribute $250/kid/month with three kids. I started when they were each about 3 months old.

Based on 9:38's post I think my kids need to look into trade school because I am not shelling out almost $700K for a college education.

[Anonymous]

PP, MD's 529 plan is also set up the same way - the funds are based on the child's age, but you can change your options if you really want to.

[Anonymous]

Anonymous wrote:OP, where do you live? You need to consider any tax breaks you may receive in your state for using their plan.

We use the VA VEST 529 and have been pretty pleased so far.

We live in Alexandria, VA. I believe $4000 is tax deductible per parent so we will probably contribute $4000 per year per child.

I JUST started thinking about this as the tax year is coming to an end.

[Anonymous]

We are using the other VA plan, the Virginia Prepaid Education Program. Guarantees tuition and fee paid at any Virginia state school, and if your child decides to go private or to another state's school, you can withdraw the $ and use just like you would any other 529. We put in 500 for each child per month (twins) for a total of $1000.

[Anonymous]

Anonymous wrote:VA's 529 plan, the Virginia Education Savings Trust (VEST), is always one of the top rated plans based on investment returns and low fees. As a VA resident you will receive a state tax deduction for contributions up to 4k per account. You can set up the accounts and fund them electronically online. The aged based investment options are based on your child's age and years until they will be expected to withdraw the funds for college. The investments will automatically adjust over time from a more aggressive higher stock investment allocation to a more conservative allocation as they get closer to college age. So you don't have to reallocate the accounts on an annual basis.

I work for a financial firm and we ran the numbers just recently for a newborn who is expected to go to a state school (current tuition of 17k/yr). We inflated the current tuition cost by 6% and assumed an investment teturn of 8%. Based on these assumptions the $ amount needed by the time they enter college is $230,000. To reach this goal the parents will need to contribute $400/month until the age of 18.

You can use the VA 529 plan funds for out of state schools and some international schools as well but the tuition will most likely be significantly higher.

The plan is to max out the $4000 per account per year and then pay the remainder once the kids are in college.

I just visited http://www.virginia529.com/ for the first time.

Is VEST better than College America? College America is with American Funds and I believe that American Funds is highly regarded. My company invests with American for our 401k. The rest of our retirement savings is with Fidelity.

[Anonymous]

You can contibute more than 4k/year but you only get a tax deduction for 4k/yr. Contributions over 4k have an unlimited carryforward until all contributions have been deducted.

The College America plan can only be set-up through a financial advisor so you need to take into account additional fees that the advisor will charge on top of the standard 529 plan fees. You cannot set-up this type of plan on your own. The VEST or Prepaid plans you ca set-up on your own without advisors.

[Anonymous]

Anonymous wrote:You can contibute more than 4k/year but you only get a tax deduction for 4k/yr. Contributions over 4k have an unlimited carryforward until all contributions have been deducted.

The College America plan can only be set-up through a financial advisor so you need to take into account additional fees that the advisor will charge on top of the standard 529 plan fees. You cannot set-up this type of plan on your own. The VEST or Prepaid plans you ca set-up on your own without advisors.

Thank you for the clarification.

We are new to the area and just purchased a home. We are finally finished with grad school and residency/fellowship. Several financial advisers have reached out to us but we have yet to find out that we like. We are just taking it one step at a time. Just finished getting our life insurance policies in order. Next is the 529k.

[Anonymous]

Anonymous wrote:You can contibute more than 4k/year but you only get a tax deduction for 4k/yr. Contributions over 4k have an unlimited carryforward until all contributions have been deducted.

The College America plan can only be set-up through a financial advisor so you need to take into account additional fees that the advisor will charge on top of the standard 529 plan fees. You cannot set-up this type of plan on your own. The VEST or Prepaid plans you ca set-up on your own without advisors.

Is it beneficial to have a financial advisor set these up for us? Are the returns much better?

We were looking into signing up with an advisor a few months ago but he started getting aggressive and it turned me off. I vaguely remember our life insurance rep telling us to sign up directly and skip the advisor for the 529. I'm assuming he meant the VEST plan and the financial advisor was trying to set us up with College America.

[Anonymous]

We invest in the VEST program in VA and contribute $334 per month, which works out to just over $4000 per year to get the State tax deduction.

[Anonymous]

I am an advisor and the VEST plan's performance and offering is comparable to the College America/American Funds plan. We use to set-up plans for clients with College America but now recommend they don't pay our fee and set them up directly with VA into the VEST plan.

[Anonymous]

In Virginia the law is that you can deduct up to $4,000 per account per year. The thing is each child / parent combination is a separate account and each investment option is a separate account. For example you could do the following:

1) Mom contributes to Child #1 account $4,000 and invests in total bond fund
2 ) Mom contributes to Child #1 account $4,000 and invests in total stock market
3) Mom contributes to Child #2 account $4,000 and invests in total bond fund
4) Mom contributes to Child #2 account $4,000 and invests in total stock market
5) Dad contributes to Child #1 account $4,000 and invests in total bond fund
6) Dad contributes to Child #1 account $4,000 and invests in total stock market
7) Dad contributes to Child #2 account $4,000 and invests in total bond fund
8) Dad contributes to Child #2 account $4,000 and invests in total stock market

and deduct $32,000 in a single year. If you wanted to add more investment options you could deduct even more.

[Anonymous]

Anonymous wrote:In Virginia the law is that you can deduct up to $4,000 per account per year. The thing is each child / parent combination is a separate account and each investment option is a separate account. For example you could do the following:

1) Mom contributes to Child #1 account $4,000 and invests in total bond fund
2 ) Mom contributes to Child #1 account $4,000 and invests in total stock market
3) Mom contributes to Child #2 account $4,000 and invests in total bond fund
4) Mom contributes to Child #2 account $4,000 and invests in total stock market
5) Dad contributes to Child #1 account $4,000 and invests in total bond fund
6) Dad contributes to Child #1 account $4,000 and invests in total stock market
7) Dad contributes to Child #2 account $4,000 and invests in total bond fund
8) Dad contributes to Child #2 account $4,000 and invests in total stock market

and deduct $32,000 in a single year. If you wanted to add more investment options you could deduct even more.

OP here. I was under the impression it was $4000 PER parent per year.

[Anonymous]

In MD each parent can have a separate account and deduct for each child's account, and you can deduct for both the prepaid college plan and the college savings plan (but you couldn't deduct for a stock investment and a bond investment).

[Anonymous]

I live in MD and do the MD college savings plan one. I currently contribute $4700/year for my 6-year old.

[Anonymous]

From the VA 529 program guide here:

http://www.virginia529.com/documents/general/vcsp_program_guide.pdf

page 4

"Virginia taxpayers with VA529 accounts may deduct up
to the lesser of $4,000 per year or the amount contributed,
for each VA529 account they own, with an unlimited
carry-forward of unused deductions."

It is definitely per account, not per parent or per child. All of the documentation I get from the VA 529 plan has a different account number for each combination of investment choice, parent, and child.