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

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[quote=Anonymous][quote=Anonymous]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.

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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. [/quote]

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