529

can anyone give me advice about these? Who on here has one of these set up? are they good, bad...what?

 

I set up two, one for my 2 month old and one for my 2.5 year old about a month ago. Check out savingforcollege.com to see what's available. I went through a financial advisor as I wanted to use American Fund's College America plan. It's rated as one of the best AND I get the state tax deduction. There are other ones out there just be sure to check out the expense ratios. If you like your state's plan check to see if it offers the tax deduction. Also, there's another thread somewhere in this forum that lists many benefits of the 529.

 

man, i have no clue. i just would like to help out my half brother who is 11. i heard something about them on the Dave Ramsey show. My mom has really pissed me off the way she's dropping the ball on him. The way her and her husband have fucked up their finances, she said there is nothing for him if he should go to college.

i figured, i could help out some.

 

I have a 529 opened for both of my daughters. The wife and I plan to open an ESA for both of them and start doing our college investing in that. The difference in an ESA, also called Coverdale account, and a 529 is that ESAs only allow $2,000 a year. 529s are like $250K or so (not that I have ever gotten close to that). Also, ESAs typically have better investment options and you can use an ESA for Private School tuition. A 529 cannot be used at a Private School. So, the way we are doing it is that any money our girls get goes into their 529. We will do our investing in the ESAs. Anything we want to do above $2K will go into a good mutual fund. Yes it won't be tax free growth but we also wouldn't be limited in what we could use it for like you are with a 529 or ESA.

Since it sounds like you are dealing with a difficult situation, you may want to talk to an advisor about how you can ensure your family can't ever get hold of any money you set aside for your half-brother. I set-up my daughers 529 such that I control it and they are the beneficiary and my wife is the successor if I die. I think that should work in your situation but I would hate for your family to take out money you put in there if they are really that messed up with their finances (BTW, that would be taxed at their income tax rate + 10% for non-education withdrawal).

 

i was reading about 529's and i thought i read that ...well it said anyone can set one up for a kid. It sounded like my mom would never be able to touch it and it would be to use for school only and if for some reason he decides to not go to college it would come back to me. He couldn't just take it and decide to buy a car or something with it.

I wouldn't even want to tell her i was doing it.

 

Yes, the person that opens the account owns it. You could take it to buy a car, but you'll pay taxes. I think 529s are a good option, but there are others as wolfpac described. It's admirable you are actually considering doing this.

 

Well, i like the kid and i feel sorry for him. He's actually a very smart kid but it doesn't matter, if you have dumbass parents who will ruin it for you.

I believe in helping others but i have enough people in my immediate surroundings that need help instead of just blindly giving to a charity where you're not sure where the money goes. Plus, he is my half brother and he has two dumbass parents and i've never seen an 11 yr. old as depressed as he is. Up until my father died, the only thing i worried about was was school and having fun.

 

Set up 2 for my kids (5 and 7). Pretty good stuff.

 

I've got one for each of my children too. And you dont have to be the parents to open one. My grandparents have started one for all of their great-grandchildren. The American Funds Virginia Plan is the one I'm in too. Its been said to be the best.

 

That's the one I got for both my kids. If you live in VA you also get the state tax deduction, if not, it's still a good plan.