Comments on: Saving for College: 529s and All That http://theincidentaleconomist.com/saving-for-college-529s-and-all-that/ Economics, Health Policy, Law, Life: Musings of Curious Minds. Thu, 29 Jul 2010 14:17:57 -0500 http://wordpress.org/?v=2.8 hourly 1 By: Austin Frakt http://theincidentaleconomist.com/saving-for-college-529s-and-all-that/comment-page-1/#comment-675 Austin Frakt Wed, 21 Oct 2009 17:29:51 +0000 http://theincidentaleconomist.com/?p=1132#comment-675 @Samples - I've looked into some pre-paid options. They all have some strings. If you know your child will go to a particular school or one of a set of schools covered by the plan then it may make sense. Since I am not qualified to broadly evaluate all such options I will not say more. Each individual should investigate these on his/her own. Perhaps others will have more to say about this or suggest a website that has better advice. One place to look and to ask questions is the <a href="http://www.bogleheads.org/forum/index.php" rel="nofollow">Bogleheads Investment Forum</a>. I know this topic has been discussed there. I've even participated in some of those discussions. All I recall with clarity right now is that I concluded for myself that I was more comfortable with a 529 than any prepaid plan I was aware of. See also this recent NY Times article: http://www.nytimes.com/2009/10/05/education/05college.html?_r=1 @Samples – I’ve looked into some pre-paid options. They all have some strings. If you know your child will go to a particular school or one of a set of schools covered by the plan then it may make sense. Since I am not qualified to broadly evaluate all such options I will not say more. Each individual should investigate these on his/her own. Perhaps others will have more to say about this or suggest a website that has better advice.

One place to look and to ask questions is the Bogleheads Investment Forum. I know this topic has been discussed there. I’ve even participated in some of those discussions. All I recall with clarity right now is that I concluded for myself that I was more comfortable with a 529 than any prepaid plan I was aware of.

See also this recent NY Times article: http://www.nytimes.com/2009/10/05/education/05college.html?_r=1

]]> By: Samples http://theincidentaleconomist.com/saving-for-college-529s-and-all-that/comment-page-1/#comment-674 Samples Wed, 21 Oct 2009 17:23:18 +0000 http://theincidentaleconomist.com/?p=1132#comment-674 What about States that offer prepaid programs, like Florida? http://www.myfloridaprepaid.com/ Most people I talk to utilize the prepay for tuition and the 529 for ancillary expenses. In your view, is there more upside to taking the lump sum, prepaid money and investing it in the 529 at birth or soon thereafter, or is the security of the prepaid worth more? What about States that offer prepaid programs, like Florida?

http://www.myfloridaprepaid.com/

Most people I talk to utilize the prepay for tuition and the 529 for ancillary expenses. In your view, is there more upside to taking the lump sum, prepaid money and investing it in the 529 at birth or soon thereafter, or is the security of the prepaid worth more?

]]> By: Austin Frakt http://theincidentaleconomist.com/saving-for-college-529s-and-all-that/comment-page-1/#comment-673 Austin Frakt Wed, 21 Oct 2009 15:16:10 +0000 http://theincidentaleconomist.com/?p=1132#comment-673 @TFB - Thanks. I updated the post and cited your comment as the source :) @TFB – Thanks. I updated the post and cited your comment as the source :)

]]> By: TFB http://theincidentaleconomist.com/saving-for-college-529s-and-all-that/comment-page-1/#comment-672 TFB Wed, 21 Oct 2009 14:34:00 +0000 http://theincidentaleconomist.com/?p=1132#comment-672 Gift tax exclusion: http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#5 Bunch five years worth of gifts in one year: http://www.irs.gov/instructions/i709/ch02.html#d0e849 (wait for 2009 form 709 instructions for updated numbers for 2009) Gift tax exclusion: http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#5

Bunch five years worth of gifts in one year: http://www.irs.gov/instructions/i709/ch02.html#d0e849 (wait for 2009 form 709 instructions for updated numbers for 2009)

]]> By: Austin Frakt http://theincidentaleconomist.com/saving-for-college-529s-and-all-that/comment-page-1/#comment-671 Austin Frakt Wed, 21 Oct 2009 12:07:27 +0000 http://theincidentaleconomist.com/?p=1132#comment-671 @TFB - The source I cited says $12k. That doesn't make it right. It could be out of date. It follows the gift tax rules, right? Anyway, if you are aware of something that documents the cap at $13k, please share it (URL). Would that also imply one can contribute five times that amount in one year and none for the next five years (i.e., $65k)? Good point about non-parent contributors. @TFB – The source I cited says $12k. That doesn’t make it right. It could be out of date. It follows the gift tax rules, right?

Anyway, if you are aware of something that documents the cap at $13k, please share it (URL). Would that also imply one can contribute five times that amount in one year and none for the next five years (i.e., $65k)?

Good point about non-parent contributors.

]]> By: TFB http://theincidentaleconomist.com/saving-for-college-529s-and-all-that/comment-page-1/#comment-668 TFB Wed, 21 Oct 2009 03:18:13 +0000 http://theincidentaleconomist.com/?p=1132#comment-668 About that "$12,000 per parent per year" contribution cap, isn't it $13,000 per year per contributor per beneficiary? The person contributing to a 529 does not have to be a parent. If there are three children, each child gets a $13,000 per year cap from each contributor (parent, grandparent, aunt, etc.). About that “$12,000 per parent per year” contribution cap, isn’t it $13,000 per year per contributor per beneficiary? The person contributing to a 529 does not have to be a parent. If there are three children, each child gets a $13,000 per year cap from each contributor (parent, grandparent, aunt, etc.).

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