I know this has been asked many times but I want to know what people think about 529 in 2024. Specially given the fact the unused funds could be rolled over in 15y (at 35K limit). I am in CA so don't get any state tax benefits. So have you bought a 529 and what state plan? Would it be simpler to just get the Nevada 529 through Vanguard? TC 400K
Mixed signals about 529. It counts against your kids in financial aid. BUT if you’re on Blind your kids will likely get ZERO financial aids. Some states have taxes deductions but if you’re on blind you won’t qualify for any deductions. Look into having grandparents 529 if you want to be absolutely sure it won’t count against your kids. My personal opinion is that 529 is completely useless for saving for college. It’s better off max out Roth IRA or 401k. There might be some benefits of 529 to use on your own college education. Nice new law starting 2024 to let you rollover to Roth from 529 plans that are at least 15 years old.
In similar situation with no state benefits, I went with Utah’s based on this: https://www.investopedia.com/best-529-plans-5070533 and this https://www.morningstar.com/personal-finance/morningstar-529-ratings-best-plans-2023
I'm debating between NY and Utah. You bought through my529 site?
Yes bought through my529. The reason I didn’t go with NY was because it had some bizarre restrictions for out of state investors IIRC. I don’t remember the details but look into it. I’m not based in NY.
529s are most powerful when you have the initiative to set them up when your kids are infants, and the discipline to contribute to them consistently until they graduate high school. Getting tax-free growth on 18 years of index funds is amazing. Like the person above said, they're quite flexible so you can use them even if your kids don't go the "traditional" higher education route. My kid will have no shortage of life expenses that they will have to deal with in early adulthood. No reason to burden them with college costs on top of that when there's an easy way to prepare for it.
Sure they’re worth it. After you’ve already maxed all other tax advantaged options. I max my 401k, backdoor roth, megabackdoor already and can’t use an HSA so 529s are now the option. I have two. One in Utah and one in Ohio. I put 18k into each of them over the year. One has ~100k in it right now and that kid is 1. The other only has 10k in it but that kid doesn’t exist yet.
Curious why Ohio? I guess 100K is in Utah. I think I am mostly going with Utah too.
Honestly I don’t remember. For funsies? Maybe some folks at work mentioned it. Utah’s website is very rudimentary, just a warning. But it works fine for what it is.
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I have a newborn and a 529 was a no brainer. It's so incredibly versatile (not just rollover but reallocation for *anyone* seeking pretty much *any* form of education) - it's just common sense. I'm in a similar position statewise (WA) so went with the best available via my existing provider, Fidelity - which happened to be MA. Check morningstar, as long as you go with silver or gold you can't go wrong (and Utah is still considered the best last I checked). Check out the Money Guys material on 529. Or anyone else, really. You'd be hard pressed to find counter opinions aside from finance teens on tik tok who preach yeeting your savings into day trading and house flipping
How much would it make sense to put in per year? I go with $36K which is the limit of gift tax but I wonder if it makes sense to put in more.
Buy another primary home or rental property for your new born, not 529.