529 confusion--please help!

[Anonymous]

So we are already way behind on college savings but I want to start 529 accounts for our two kids ASAP. I went online to open one through the DC College Savings site and was surprised to find that there are several choices within DC. Most are by age (0-5, 6-10, etc) but there are some others that are completely different. Should I just go with the DC Savings Plans for my kids' ages? Anyone BTDT? I know, I know, we should talk to our financial adviser about this. But we don't have one yet. Help, please?

[Anonymous]

We use the VA plan but went with the age appropriate plan as it seems to be the safest/make the most sense.

[Anonymous]

Go by age. They adjust risk as the day of reckoning gets closer.

[Anonymous]

OK, thanks a bunch.

[Anonymous]

Anonymous wrote:Go by age. They adjust risk as the day of reckoning gets closer.

I think that is bad advice. You want the low fee State Street Equity Fund, otherwise the fees on those others (0.50% vs 1.35% - nearly 3X) will kill your compounding interest.

[Anonymous]

Just open it. You can switch funds later.

[Anonymous]

You need to consider everything. Fees are a real issue (as already posted), as are transaction fees in switching between plans. But you also want to spend a few minutes comparing 529s. There is plenty of public data showing how each state 529s stack up. If you are a DC resident, of course there are tax advantages to using the DC plan, but other plans may have more investment options, flexibility, investment advice etc. Just saying don't let the understandable desire to start funding up overwhelm the need to do look at everything.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Go by age. They adjust risk as the day of reckoning gets closer.

I think that is bad advice. You want the low fee State Street Equity Fund, otherwise the fees on those others (0.50% vs 1.35% - nearly 3X) will kill your compounding interest.

+1
And please don't go thru an advisor!!! Throwing money away.

[Anonymous]

Anonymous wrote:So we are already way behind on college savings but I want to start 529 accounts for our two kids ASAP. I went online to open one through the DC College Savings site and was surprised to find that there are several choices within DC. Most are by age (0-5, 6-10, etc) but there are some others that are completely different. Should I just go with the DC Savings Plans for my kids' ages? Anyone BTDT? I know, I know, we should talk to our financial adviser about this. But we don't have one yet. Help, please?

It's very easy to open an account and the people who staff the DC plan are very good. You can just download the forms, choose a couple of funds (I would choose the lower fee ones, not the age-based ones) to get going. You can do this on-line or with a form that you send in. You can have $ withdrawn automatically from your bank account. Once it is set up you can always change things. If you live in DC you will get a tax break on DC taxes up to $4000 per parent per kid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Go by age. They adjust risk as the day of reckoning gets closer.

I think that is bad advice. You want the low fee State Street Equity Fund, otherwise the fees on those others (0.50% vs 1.35% - nearly 3X) will kill your compounding interest.

+1
And please don't go thru an advisor!!! Throwing money away.

+2

Also, while I generally agree with the "just open it" advice, you can move the money only once per year, fyi