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I have 4 kids.
Child A-529 DC in my name. We get the 4000/y tax break Child B-DC 529 in DH name for tax break Now I am setting up 529s for children C & D. I'm trying to figure out if it makes sense to do a non-DC 529 for either of them, as if we Max all of them out tax-break wise, yearly, will it matter? I'm thinking child D is a DC 529 in my name to extend taxbreaks, but does it make sense to do C in a higher performing one since I don't think we will benefit from the tax break of DC with that one. A and B are 2years apart B and C are 3 yrs apart C and D are 4 years apart. I feel as if this should be clear but I'm completely stumped. |
| Do DC. Contribute $20k per kid today. 2 years after, transfer funds to a lower cost fund. Take $4,000 per kid tax break every year for 5 years. |
| Don't be chasing the tax beak. Seek out returns. Compare the returns you're getting with the returns elsewhere. If elsewhere equals a higher ROI all things considered (including the tax break) go elsewhere. Pretty simple. |
| Returns will all be relatively close. Seek out the tax breaks, they're significant. |