We use the VA 529 plan. $2400 per year plus half of all bday and Christmas cash. It isn’t perfect, but it is something.

VA Prepaid 529s for both kids, plus money for both each month in INVEST for room and board/ private. Kids are 14 & 16. By the time they graduate, in state tuition, room and board will be covered at any 4 year VA school. We can do some above and beyond with income— probably enough for them to go OOS most places, it not private. Oldest is a TJ junior, and has the stats to easily get into W&M, which is by far the best fit school for him (small, nerdier, more intense, excellent in his area of physical science) — which is 5-6 k more a year than UVA. But the same cost if you use the prepaid 529. It is a great feeling to head into college applications with such a great safety school fully paid for.

Anonymous wrote:My advisor suggests contributing in local state for tax deduction than after the funds have been there a year, you can transfer to a better state plan. DC was bad (where we live) with high fees, but they changed financial managers and I have not looked into the new DC manager / plan. The states were we have some funds are IL and NY which both run good plans (IL was better and then NY slightly better so that's why we have both at moment).

New DC plan is much better. Management fees around 0.35%, so still twice as much as Vanguard, but not 6 times as much.

My advisor suggests contributing in local state for tax deduction than after the funds have been there a year, you can transfer to a better state plan. DC was bad (where we live) with high fees, but they changed financial managers and I have not looked into the new DC manager / plan. The states were we have some funds are IL and NY which both run good plans (IL was better and then NY slightly better so that's why we have both at moment).

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

From the VA 529 program guide here:

http://www.virginia529.com/documents/general/vcsp_program_guide.pdf

page 4

"Virginia taxpayers with VA529 accounts may deduct up
to the lesser of $4,000 per year or the amount contributed,
for each VA529 account they own, with an unlimited
carry-forward of unused deductions."

It is definitely per account, not per parent or per child. All of the documentation I get from the VA 529 plan has a different account number for each combination of investment choice, parent, and child.

This is nutty. Not questioning you, it appears to be true. It's just a pretty crazy deduction scheme.
In a good way, if you have that much to invest. Though it seems like one more way for the wealthy to shelter a buttload of income from taxation.

You're only avoiding state taxes, not federal. As a pp said, if you make $250k per year and contribute $5K, you save a whopping $154 in taxes.

+1. The state deduction is a little joke. What can be real dough are the fund fees, which is why we chose to ignore the DC plan and go straight to the Utah Vanguard one. Anyone thinking about 529s should prepare a basic excelsheet and see what happens over 10, 15 years.

+2. I make 84K now and have contributed to a Utah plan for DD since 2011 and making 60K. I remember folks arguing me down about losing the tax incentive by not going through DC first. I was contributing 50/ month initially. What matters most for me is having as much money as possible in the account. That meant high performing plan with low fees.

Utah - good age-based programs and low fees.

The math is clear that if you can front-load the payments, you are way better off. We started as soon as they were born and put our bonuses toward them when the kids were young. We had them fully funded for 80% of the expected cost of private school by the time the oldest kid was 12.

MD

2 kids at $9k each per year. I’m hoping to stop soon and move the money to a regular investment fund.

2 kids —
4K/parent for both so 8K/kid = 16k total/yr

NY

3 kids

1250/kid

3750 total/month

I do $200/month per kid into the VA Invest (Stock Index).

We do $500/month into the VA 529 plan. DS is 6.5 years old.

This thread is getting a very different audience than most. The other 529 threads I've seen, $1000/month/kid seems more typical and I always wonder if we're doing enough.

We currently do the max for Md deduction for two kids. So 10k a year total, 5k each. I ran a calculator for fees vs Vanguard and it would take a rather long time to matter, but we might transfer out of Md and into Vanguard at some point. You can contribute for the state tax deduction and then transfer out to a different plan.

$500 to MD for the $250 state match for $50/$100/$250 parent contribution (we need to do $250 per parent for that.)

Then WI because we wanted to use a socially responsible/ESG investment fund (as we do for our 401ks/IRAs) and MD doesn't have one. Several states do (https://www.forbes.com/sites/brianboswell/2017/03/22/7-college-savings-plans-for-socially-conscious-investors/#ee0dbe473f70) and we liked WI's TIAA fund the best (good performance, low fees, and actually engages in shareholder activism on ESG issues unlike Vanguard.) A couple other states have the TIAA Social Choice fund as well.

We have two through USAA. (We are MD residents, but I felt like USAA was a bit better performance.) We put in $50/month for each kid through automatic deposits. Then we put in any birthday checks, christmas money, etc. (Kids are 4 and 2, so we still have daycare expenses.)

We did the VA prepay for both kids. We now put $700/mo away in the invest. Not sure which one. DH handles it and is always aggressive with any of our investments.