beb06 said:

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khkman22 said:

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I'm am not 100% sure this is correct, but I believe this is what someone from Ed Jones told me. If you have more than one kid, you can change the beneficiary name on the account, but you cannot transfer the money from one account to another.

So, depending on how close in age your kids will be, I wouldn't try to fund both of them early and then find out kid 1 doesn't need the money because they saved enough of their own, got scholarships or had better returns than projected. You will incur a penalty if you withdraw for non-educational purposes and you won't be able to transfer to kid 2's account.

If you had a 3rd kid, then you should be able to change them to the beneficiary on the 1st account opened to use for kid 3. I would look at opening as few as possible that would still work out based on the spacing of your kids.

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I don't think that is correct. There should be no issue transferring money between them, or changing beneficiaries. Setting up a separate account for each child is a commonly recommended approach because of that.

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I read up on this about a year ago. You can change the beneficiary names, but there are limitations if the next beneficiary is already in college or receiving funds. I don't remember the exact verbiage, but it was limiting enough that we opened three 529s for our boys that are 22 months apart so we don't get caught in limbo when they are all in college at the same time.

FWIW we opened a Utah 529 for our first born and it has returned almost 40% since then (2013). We are pleased with the results. Our twins accounts have not fared as well, but that's because they haven't received the same amount in reinvested dividends.

We have three kids and originally started with education IRAs for them through Vanguard at 2K per year. We prioritized retirement funding first.

After a while we continued the IRAs and also opened up Missouri MOST accounts for each to do even more until they hit 18 and we start spending. Those are also low cost vanguard funds.

I think the key is regular contributions and start once you get their social security numbers.

So is the overall consens to put an account in our name and child as beneficiary?

Yes. That is correct.

pacecar02 said:

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How does a 529(having the child named in the 529) affect the students FAFSA when applying for scholarships and financial aid?

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Only a small portion (5-6%) of the 529 gets added to the families expected contribution. But if someone other than the parent or child is the account owner, like a grandparent, then all of the distribution is counted as income to the beneficiary and could affect how much Financial aid they receive the following year.

By the time your kids are ready to go to a university you will not have to worry about it. The Dems have a plan to pay for not only tuition but room and board. You don't believe me ... well you need to listen to Beto, he and the Bernie have it all figured out. Of course a college education will not be worth a crap by then.

If the socialist don't get their way and the government does not get involved with providing college for everyone that wants to go you need to start putting a set amount every month in an account investing in equities or an Index ETF like SPX. I started an account for both my kids and it paid for all their education. One was on a 5 year program and the other had an additional 2 years of nursing school. The thing you need to realize is you can have and probably will have a period like 2000-2009 where there is zero return over that period during the first 18 years. Plan accordingly. You may have to reset your spending priorities during the next 18+ years to ahve the funds to put into their accounts.

I have told my kids the best gift I have given them is zero college debt.

Duncan Idaho said:

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If I had kids their college plan would consist of "get out your phone and go to www.goarmy.com"

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Same here.

Quinn said:

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drill4oil78 said:

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By the time your kids are ready to go to a university you will not have to worry about it. The Dems have a plan to pay for not only tuition but room and board. You don't believe me ... well you need to listen to Beto, he and the Bernie have it all figured out. Of course a college education will not be worth a crap by then.

If the socialist don't get their way and the government does not get involved with providing college for everyone that wants to go you need to start putting a set amount every month in an account investing in equities or an Index ETF like SPX. I started an account for both my kids and it paid for all their education. One was on a 5 year program and the other had an additional 2 years of nursing school. The thing you need to realize is you can have and probably will have a period like 2000-2009 where there is zero return over that period during the first 18 years. Plan accordingly. You may have to reset your spending priorities during the next 18+ years to ahve the funds to put into their accounts.

I have told my kids the best gift I have given them is zero college debt.

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I received this gift from my parents and totally agree. I plan to do the same for my kids.

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Also agree. One of my most basic financial goals is to launch my kids into world debt free.

I am fortunate that my parents opened a 529 for both of my kids and provided some initial seed money. I don't have plans to earmark any future funds for a while. My own financial future is more important. I intend to "pay as I go" of their college. I have 16 years.

Maybe look at the Tx Tomorrow Fund

https://www.texastomorrowfunds.org/

I have two high school kids and was fortunate to lock in their tuition prices 15 years ago. That program is locked, but this one does provide some prepayment options.

So this coupled with a 529 is gonna knock down a big chunk of the costs.

Paying for their education was my gift to my children. They both started their "real" lives not owing anyone a dime.

We did the Vanguard 529 and Upromise card tied to the account. When they were little, we did about $100 per month or kid. As the oldest hit high school, we bumped it to splitting $1000 between them until we were down to one, then the whole amount went into her 529. Mostly.

I say mostly because our advisor told me the IRS was starting to crack down on "room and board". If they are on a fixed rent and meal plan - then the 529 is good. If you "give them money for food" and that comes through a 529, they are starting to ask for receipts in audits. Just a heads up.

Both kids graduated from A&M. Both were excellent students in high school, particularly my son. Killed it on the PSAT and SAT. Top 2% in his class. Got wait listed at Yale. Got $0 in scholarship money from A&M. As someone else said, don't count on scholarship money. More and more often that money is tied to socioeconomic considerations.

Good luck helping your kids through school!

O'Doyle Rules said:

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Step 1 : max out your own 401k plans for your retirement

Step 2: once step 1 is done, think about funding for your kids college.

I can't imagine how many parents are short changing their retirement to pay for their kids college

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Agree 100%. Sometimes that means making other sacrifices.

Sacrifice and priorities is the key word. I have seen parents of kids not have any money to send their kids to college, but had plenty of money to go out to restaurants several times a week when the kids were growing up. People need to set priorities in their life and your kids education should be up near the top of the list. Certainly higher than entertainment expense. It only takes a few hundred $ a month to put in an education account once the kid is born. How much do you spend going to restaurants several times a week. At least a few 100 $'s a week. I also use to tell the grandparents to add to their college fund instead of giving useless birthday presents when they are 1-3 years old. I had an experience with one of my kids grandparents that gave several thousands of $ for a HS graduation gift that they had set aside for each grand kid. I told them if they would have put that in their college account 18 years before it would have tripled or more in value.

Thanks for all the good advice. My wife and I are pretty good about saving and investing. I contribute to my company's 401k up to the match and wife contributes to her 457b (which is another topic i'd like feedback on at another time) through her school district. We also have Roths and are pretty spending conscious.

If I was grandpa...I would have taken that gift right back.

My dad refuses to put money in to the 529's I have set up for my kids. But it is his money and I appreciate the money he sets aside for them whether it is in their 529 or the CD that it is in.

I have the same issue.

I used to mention it to them casually the first couple years, but they like to buy the kids "stuff", so I dropped it.

It's their prerogative.

Diggity said:

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If I was grandpa...I would have taken that gift right back.

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After one year that gift was wasted by an 18 year old in college. Told the in-laws and my parents to put cash into each grand kids college account no matter the amount if they wanted to invest in their future. If you give them cash directly it will be spent on frivolous things when they are stupid teenagers.

The accounts, by law, were put entirely in their names at 18. We did not have 529s at that time. I also made this a lesson in money management and investing. Each kid had to manage the account to pay college expenses. I monitored their spending, but they learned how to manage a budget + I told them anything left was theirs after graduation. They learned to budget efficiently.

That's a different story. You should have probably specified that that the money would be spent on tuition or room/board.

My comment was directed at your original post. I'm sure you were a little bit more polite about it but telling someone after the fact that their gift isn't appreciated is a good way to ensure no future gifts.