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Thoughts?---college savings 529 plan

Discussion in 'Money Matters' started by sssaustin, Jul 5, 2007.

  1. sssaustin

    sssaustin Senior IL'ite

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    If anyone has made a savings in 529 plan....can you shed some light on this issue?How profitable is this?Is it really worth the investment as it seems?

    Your valuable inputs would very much help others.
     
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  2. Shobanag

    Shobanag Bronze IL'ite

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    HI - we have a 529 plan for my daughter since 2000 when KS offered the plan. Whether it is a good investment is a personal opinion. The returns have not been great for us but we will not pay any tax when we take it out plus each year we got a state tax deduction for the amount of investment (subject to limitations). So when we take the tax benefit received plus the fact we will not pay any tax on it when we take it out, the lower rate of return is not too bad. Since you live in TX and have no state taxes, you may want to evaluate that. Each state is different in what they offer - and its benefits. One thing that is not in your control is the investments offered - usually they are limited. Again, I would ask you to research your state 529 plans and look for historical data like rate of return, etc. before you invest.

    Hope that helps..

    Shobana
     
  3. sssaustin

    sssaustin Senior IL'ite

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    Thanks for your inputs....

    I'll check it out...
     
  4. birraj

    birraj Senior IL'ite

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    Hi SSSAustin,
    We have not started 529 plan because we not sure in which state our son will go for higher education. Also if we go to India we can not qualify for spending it in indian education. I think lot of restrictions are there so we are avoiding it.

    Regards
    Birraj
     
  5. sssaustin

    sssaustin Senior IL'ite

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    Hi Brindha,

    Thats why I have been postponing and researching further.To me also it did not sound so very good as a piece of investment.

    But as I did not want to make our hard earned money sit in the bank without much of a yield i was looking into other options.

    As I was not sure if 529 plan would do me good and so posted my query in forum.


    The mixed responses in a way kinda helps me to reach to a conclusion(may be in a few week...hopefully).


    thanks all who have responded so far.
     
  6. Shobanag

    Shobanag Bronze IL'ite

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    Although 529 plans are OK investments, if you have any doubts about it, especially if you do not think that your child will go to college here, it is probably a better idea to invest in stocks, mutual funds, etc. The other thing I would mention regarding 529 plans, you will have to use the money for college and related expenses only - if not you will be taxed on the withdrawals. Judging from your response, it may not be the best investment of hard earned money. For us, since my daughter is starting college next month here in US, this was one of the various diversification methods that we used to saving for college. Good luck investing! In whatever you choose to invest, make sure you diversify.

    Shobana
     

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