Anonymous wrote:

Anonymous wrote:MD's prepaid plan is better than most states' prepaid plan because whereever you go (in-state or out-of-state) you will get paid the in-state tuition (technically the weighted instate tuition but it works out to pretty much be the UMD-CP tuition).

So you have to ask yourself whether you think in-state tuition will rise at a faster rate than your alternative investment (whatever mix of stocks and bonds), and whether you'd rather have U-MD tuition guaranteed (subject to the legislative guarantee) or the chance for more/less on your own.

I don't think the risk of not getting your prepaid tuition is that significant-- the plan is currently 125% overfunded and the way the legislative guarantee works is the governor has to include the funding in his budget and the legislature would have to affirmatively take it out if there was a shortfall, which to me seems a little unlikely all things considered.

We tend to be conservative financially and have both types of 529. We like knowing that 4 years of in-state tuition and fees are paid for, but we also have some money in a separate 529 to cover additional costs like housing, or private school.

BTW, anyone with 200k in the MD 529 (investment plan) might want to consider moving it to a lower expense plan, like Utah.

I looked at the 529 prepaid plan, and it looks like the growth is much lower. That would be the only drawback, but I guess if you assume that because the tuition would be weighted and not at the then-current tuition amount, growth is not much of an issue (?)

Anonymous wrote:

Anonymous wrote:MD's prepaid plan is better than most states' prepaid plan because whereever you go (in-state or out-of-state) you will get paid the in-state tuition (technically the weighted instate tuition but it works out to pretty much be the UMD-CP tuition).

So you have to ask yourself whether you think in-state tuition will rise at a faster rate than your alternative investment (whatever mix of stocks and bonds), and whether you'd rather have U-MD tuition guaranteed (subject to the legislative guarantee) or the chance for more/less on your own.

I don't think the risk of not getting your prepaid tuition is that significant-- the plan is currently 125% overfunded and the way the legislative guarantee works is the governor has to include the funding in his budget and the legislature would have to affirmatively take it out if there was a shortfall, which to me seems a little unlikely all things considered.

We tend to be conservative financially and have both types of 529. We like knowing that 4 years of in-state tuition and fees are paid for, but we also have some money in a separate 529 to cover additional costs like housing, or private school.

BTW, anyone with 200k in the MD 529 (investment plan) might want to consider moving it to a lower expense plan, like Utah.

I looked at the 529 prepaid plan, and it looks like the growth is much lower. That would be the only drawback, but I guess if you assume that because the tuition would be weighted and not at the then-current tuition amount, growth is not much of an issue (?)

Anonymous wrote:MD's prepaid plan is better than most states' prepaid plan because whereever you go (in-state or out-of-state) you will get paid the in-state tuition (technically the weighted instate tuition but it works out to pretty much be the UMD-CP tuition).

So you have to ask yourself whether you think in-state tuition will rise at a faster rate than your alternative investment (whatever mix of stocks and bonds), and whether you'd rather have U-MD tuition guaranteed (subject to the legislative guarantee) or the chance for more/less on your own.

I don't think the risk of not getting your prepaid tuition is that significant-- the plan is currently 125% overfunded and the way the legislative guarantee works is the governor has to include the funding in his budget and the legislature would have to affirmatively take it out if there was a shortfall, which to me seems a little unlikely all things considered.

We tend to be conservative financially and have both types of 529. We like knowing that 4 years of in-state tuition and fees are paid for, but we also have some money in a separate 529 to cover additional costs like housing, or private school.

BTW, anyone with 200k in the MD 529 (investment plan) might want to consider moving it to a lower expense plan, like Utah.

Anonymous wrote:From what i understand, it is 2500 per beneficiary per plan. So to get 10k deduction, you will need to contribute:
2500 for DC1 prepaid plan
2500 for DC1 investment plan
2500 for DC2 prepaid plan
2500 for DC2 nvestment plan

Anonymous wrote:
I'm the PP who said the tax law was confusing. This is the part I find confusing:

"In 2002, the Maryland Attorney General issued an opinion to clarify that the subtraction was $2,500
per year per qualified designated beneficiary without regard to the number of accounts set up for
each investment options. Pursuant to this opinion, the Comptroller adopted Regulation .15 under
COMAR 03.04.02."

The above is from the Comproller of Maryland's website
taxes.marylandtaxes.com/Resource_Library/Tax_Publications/Administrative_Releases/Income_and_Estate_Tax_Releases/ar_it32.pdf

I'm not a lawyer or accountant but to me it sounds like you can only claim $2500 per (child) beneficiary even if you have multiple accounts. So you could set up 2 accounts per parent or a total of 4 to benefit each child but can't deduct more than $2500 per year.