Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I live in MD and chose the investment plan. But I would not actively encourage my kids to attend MD state schools. Not that there's anything wrong with them academically, but to me, part of college is getting out from under the thumb of your parents. So my reasoning may not apply well to your situation since you want your kids to stay in-state (although I would note there are tons of colleges not in MD but within an easy drive of here). I also share the pp's wariness of the prepaid plan. I felt the investment plan was simpler, and I know exactly where I stand with it. We contribute 10k a year total for 2 kids - the max tax deduction we can get for havng two accounts (one in each parent's name) for our two kids.

OH, each parent can take $2500 deduction for each child? So 2kids * 2parents * 2500 = 10000 deduction? Didn't know that. Good to know.

If you only have two accounts, you get two deductions. You would need 4 accounts for a $10k deduction.

can you have 2 of the same types of accounts per child? So each parent can open up an account per child = 4 accounts?

I have the same question. I have read the MD state tax laws on this topic and I find the wording very confusing. We now have a MD529 that I opened and we contribute $2500 but want to increase our contribution and I was wondering whether I should open another one (for the same beneficiary - we have just one child) in my husband's name.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I live in MD and chose the investment plan. But I would not actively encourage my kids to attend MD state schools. Not that there's anything wrong with them academically, but to me, part of college is getting out from under the thumb of your parents. So my reasoning may not apply well to your situation since you want your kids to stay in-state (although I would note there are tons of colleges not in MD but within an easy drive of here). I also share the pp's wariness of the prepaid plan. I felt the investment plan was simpler, and I know exactly where I stand with it. We contribute 10k a year total for 2 kids - the max tax deduction we can get for having two accounts (one in each parent's name) for our two kids.

OH, each parent can take $2500 deduction for each child? So 2kids * 2parents * 2500 = 10000 deduction? Didn't know that. Good to know.

If you only have two accounts, you get two deductions. You would need 4 accounts for a $10k deduction.

can you have 2 of the same types of accounts per child? So each parent can open up an account per child = 4 accounts?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I live in MD and chose the investment plan. But I would not actively encourage my kids to attend MD state schools. Not that there's anything wrong with them academically, but to me, part of college is getting out from under the thumb of your parents. So my reasoning may not apply well to your situation since you want your kids to stay in-state (although I would note there are tons of colleges not in MD but within an easy drive of here). I also share the pp's wariness of the prepaid plan. I felt the investment plan was simpler, and I know exactly where I stand with it. We contribute 10k a year total for 2 kids - the max tax deduction we can get for having two accounts (one in each parent's name) for our two kids.

OH, each parent can take $2500 deduction for each child? So 2kids * 2parents * 2500 = 10000 deduction? Didn't know that. Good to know.

If you only have two accounts, you get two deductions. You would need 4 accounts for a $10k deduction.

Anonymous wrote:

Anonymous wrote:I live in MD and chose the investment plan. But I would not actively encourage my kids to attend MD state schools. Not that there's anything wrong with them academically, but to me, part of college is getting out from under the thumb of your parents. So my reasoning may not apply well to your situation since you want your kids to stay in-state (although I would note there are tons of colleges not in MD but within an easy drive of here). I also share the pp's wariness of the prepaid plan. I felt the investment plan was simpler, and I know exactly where I stand with it. We contribute 10k a year total for 2 kids - the max tax deduction we can get for having two accounts (one in each parent's name) for our two kids.

OH, each parent can take $2500 deduction for each child? So 2kids * 2parents * 2500 = 10000 deduction? Didn't know that. Good to know.

Anonymous wrote:

Anonymous wrote:I live in MD and chose the investment plan. But I would not actively encourage my kids to attend MD state schools. Not that there's anything wrong with them academically, but to me, part of college is getting out from under the thumb of your parents. So my reasoning may not apply well to your situation since you want your kids to stay in-state (although I would note there are tons of colleges not in MD but within an easy drive of here). I also share the pp's wariness of the prepaid plan. I felt the investment plan was simpler, and I know exactly where I stand with it. We contribute 10k a year total for 2 kids - the max tax deduction we can get for having two accounts (one in each parent's name) for our two kids.

OH, each parent can take $2500 deduction for each child? So 2kids * 2parents * 2500 = 10000 deduction? Didn't know that. Good to know.

Anonymous wrote:I live in MD and chose the investment plan. But I would not actively encourage my kids to attend MD state schools. Not that there's anything wrong with them academically, but to me, part of college is getting out from under the thumb of your parents. So my reasoning may not apply well to your situation since you want your kids to stay in-state (although I would note there are tons of colleges not in MD but within an easy drive of here). I also share the pp's wariness of the prepaid plan. I felt the investment plan was simpler, and I know exactly where I stand with it. We contribute 10k a year total for 2 kids - the max tax deduction we can get for having two accounts (one in each parent's name) for our two kids.

Anonymous wrote:Great that you're thinking about this while they're still young! (Although why did you think the swipe at the US was relevant or necessary? Unless you meant lower college tuition abroad.)

Most states have (1) prepaid plans, and (2) investment funds, sort of like mutual funds. We made this choice over 15 years ago, so things may have changed, but here are the basics.

The prepaid plans guarantee tuition when your kid reaches college age, and most are transferable to out-of-state colleges if your kid takes that route. However, many prepaid plans assume a pretty conservative (i.e., low) rate of return. This is the assumed rate of return that they build into your contributions, as they compound over the years. This essentially shifts some of the risk and profit away from you and to the school.

For that reason, we went with the investment plan. These are like mutual funds, in that the risk and rewards go straight to you. On average, you will probably earn higher market returns, and end up with a bigger account balance at the end of the day, than with the prepaid plan. The risk is that the market will crash right before your kid goes to college, leaving you with a lower balance. To address these, states like Maryland have what are known as "lifecycle" plans that slowly and automatically shift you into less risky bonds as your kid approaches college age. Or, you can do this yourself, by starting out with the riskier portfolios and then shifting to more conservative investments when your kid reaches his teens, but the key here is you have to remember to do this and appreciate why it's a good idea, which is why the lifecycle funds work for many people.