New dad here... Grandparent's gave some money for a 529 account. Do I open a Texas Tuition Promise Fund or a Texas College Savings Plan?
College 529
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Last: 1 yr ago by woodiewood1
Congrats. I wouldn't go texas tomorrow. You don't know where she'll end out. I set my daughters up via vanguard. Nevada at the time had the best options. Enjoy the journey. It'll change your life for the better.
Congrats.
I went with NY's program and the Vanguard funds within. The biggest mistake I made with the 529 was researching and spending time trying to find the perfect funds, and there is nothing wrong with that, unless you did what I did and delay getting started for about 5 years.
Invest the money for college.
Spend the time with child.
I went with NY's program and the Vanguard funds within. The biggest mistake I made with the 529 was researching and spending time trying to find the perfect funds, and there is nothing wrong with that, unless you did what I did and delay getting started for about 5 years.
Invest the money for college.
Spend the time with child.
There is no tax benefit for using the Texas 529, since we do not have state income taxes, so you can shop around and use whichever state you want.
Some of the most popular are: Utah, Virginia, Nevada, Indiana.
Don't spend any time choosing investments. Each of these plans will have a fund that coincides with whatever your child's age is. Just pick it and start contributing
Some of the most popular are: Utah, Virginia, Nevada, Indiana.
Don't spend any time choosing investments. Each of these plans will have a fund that coincides with whatever your child's age is. Just pick it and start contributing
New Dad I would figure 150K for four years at tamu.
+1 for Utah
This.
I went with a very low fee index fund and am beating the actively managed option.
I went with a very low fee index fund and am beating the actively managed option.
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Another vote for Utah. Texas plans are super high fee, with no tax benefit, not a good option.
Utah was very easy to set up with lots of good fund options, including very low fee Vanguard funds. Pick one, stick the money in, set up a monthly auto-pay to keep adding to it, and let her roll.
Utah was very easy to set up with lots of good fund options, including very low fee Vanguard funds. Pick one, stick the money in, set up a monthly auto-pay to keep adding to it, and let her roll.
20 years ago we went with Vanguard thru Iowa (was best in our time frame).
91G 'EM 94GGIES!
https://www.capitalgroup.com/individual/products/college-america-529.html
Set these up when both my kids were born. One in college now and the other is almost there. Cant tell you how nice it is to have this money sitting there.
Set these up when both my kids were born. One in college now and the other is almost there. Cant tell you how nice it is to have this money sitting there.
This.AgOutsideAustin said:
New Dad I would figure 150K for four years at tamu.
Remember that your kid can pay you rent, tax-free from the 529. This works especially well if you have two kids that end up going to the same college. So make sure there is enough money in the account to cover room and board.
All animals are equal, but some animals are more equal than others
I'm assuming this only works if you own the house/condo they live in during college?
Yes, it takes some money to make work but you make the down payment on a house or condo, usually under an LLC. The 529 lets you pay the rent (mortgage) and bills up to a specified amount. That amount is set by what the University says is the average cost of off-campus housing.
A&M is somewhere around ~5-6K if I remember correctly. So if done right you can make a big chunk of the 529 back. Especially if you have two kids that go to school in the same town.
I briefly dated a girl who did something similar and they bought a duplex off of Wellborne. They had two kids, 3 years apart. So paid the mortgage for 7 years off of the savings account and rented out the other half. By the time she graduated they had the place just about paid off and were going to keep renting one half and keep the other half for game weekends.
A&M is somewhere around ~5-6K if I remember correctly. So if done right you can make a big chunk of the 529 back. Especially if you have two kids that go to school in the same town.
I briefly dated a girl who did something similar and they bought a duplex off of Wellborne. They had two kids, 3 years apart. So paid the mortgage for 7 years off of the savings account and rented out the other half. By the time she graduated they had the place just about paid off and were going to keep renting one half and keep the other half for game weekends.
All animals are equal, but some animals are more equal than others
Great to know this is an option. Thank you for the explanation
I was going to do this, but then he joined the Aggie Band!Mtn_Guide said:
Yes, it takes some money to make work but you make the down payment on a house or condo, usually under an LLC. The 529 lets you pay the rent (mortgage) and bills up to a specified amount. That amount is set by what the University says is the average cost of off-campus housing.
A&M is somewhere around ~5-6K if I remember correctly. So if done right you can make a big chunk of the 529 back. Especially if you have two kids that go to school in the same town.
I briefly dated a girl who did something similar and they bought a duplex off of Wellborne. They had two kids, 3 years apart. So paid the mortgage for 7 years off of the savings account and rented out the other half. By the time she graduated they had the place just about paid off and were going to keep renting one half and keep the other half for game weekends.
I wouldn't do a 529 at all. Return rate way too low.
Alternative investments with an IRR of 20%+ would absolutely crush anything a 529 could do.
I put all my longer term investments in life insurance products that have ZERO correlation to the S&P or oil and gas.
Then roll the capital gains into a tax deferred trust for a ZERO capital gains tax.
You are ALWAYS paying retail when you sign up for traditional investments through a broker.
Alternative investments with an IRR of 20%+ would absolutely crush anything a 529 could do.
I put all my longer term investments in life insurance products that have ZERO correlation to the S&P or oil and gas.
Then roll the capital gains into a tax deferred trust for a ZERO capital gains tax.
You are ALWAYS paying retail when you sign up for traditional investments through a broker.
What you expect an annualized return on a 529 to be?
So, where do you find these no transaction fee and no maintenance expense life insurance or trust products? Sounds like you prefer paying retail + other expense loads. But, those guaranteed 20%+ returns must be nice.Strategy said:
I wouldn't do a 529 at all. Return rate way too low.
Alternative investments with an IRR of 20%+ would absolutely crush anything a 529 could do.
I put all my longer term investments in life insurance products that have ZERO correlation to the S&P or oil and gas.
Then roll the capital gains into a tax deferred trust for a ZERO capital gains tax.
You are ALWAYS paying retail when you sign up for traditional investments through a broker.
I guess I'll just keep paying retail and getting crushed.
Danger, Will Robinson!Strategy said:
I wouldn't do a 529 at all. Return rate way too low.
Alternative investments with an IRR of 20%+ would absolutely crush anything a 529 could do.
I put all my longer term investments in life insurance products that have ZERO correlation to the S&P or oil and gas.
Then roll the capital gains into a tax deferred trust for a ZERO capital gains tax.
You are ALWAYS paying retail when you sign up for traditional investments through a broker.
I personally recommend the tiger industry for long term investments.
Tiger industry. Does that pay better than knocking off husbands?
All animals are equal, but some animals are more equal than others
The life insurance payouts are nice but big cats are a steadier source of cash flow.
Strategy said:
I wouldn't do a 529 at all. Return rate way too low.
Alternative investments with an IRR of 20%+ would absolutely crush anything a 529 could do.
I put all my longer term investments in life insurance products that have ZERO correlation to the S&P or oil and gas.
Then roll the capital gains into a tax deferred trust for a ZERO capital gains tax.
You are ALWAYS paying retail when you sign up for traditional investments through a broker.
Username checks out?
This was 15 yrs ago but I picked Virginia's plan even though I have never lived or worked and have barely visited Virginia. The investment alternatives looked pretty good. I was living in Oklahoma at the time. Have lived in Louisiana , Texas, and Ok post college graduation.
I can't really say how the investments did vs other plans but I am damned glad I set aside the money because it helped allow me to save 100% of the funds in advance to put both kids through college which will end up being slightly north of $100k each on average. It really takes the pressure off having the money set aside and I highly recommend it.
I can't really say how the investments did vs other plans but I am damned glad I set aside the money because it helped allow me to save 100% of the funds in advance to put both kids through college which will end up being slightly north of $100k each on average. It really takes the pressure off having the money set aside and I highly recommend it.
Anybody have any thoughts on for the "Non 529" crowd? I've got twins starting this fall, and we were sort of banking on another "situation" that would help us pay, but that hasn't happened yet. So we're just basically going to use loans and our savings.
Personally I've been a conservative investor having learned the hard way. I am very thankful that I never tried to play the market much with my daughters 529. Just kept putting money in until it was maxed. Slow steady returns over the last 15 years and I've got no worries whether there is enough there for her to attend whatever school she wants. Rolling the dice and shooting for some mythical 20% returns is great but there's risk to any investment and I'd hate for my kid to get to college only to discover that there's no money. Conservative isn't always bad.
A&M or somewhere else? Things that can be done will differ depending on school most likely.Aust Ag said:
Anybody have any thoughts on for the "Non 529" crowd? I've got twins starting this fall, and we were sort of banking on another "situation" that would help us pay, but that hasn't happened yet. So we're just basically going to use loans and our savings.
One at A&M, one at Trinity.
I know.
I know.
Utah here for us - 13 and 10 yrs going on now.
Aust Ag said:
we were sort of banking on another "situation" that would help us pay, but that hasn't happened yet.
Assuming you're talking about free college, but I could be way off. Maybe you're investing in the lotto.
But I have toddlers and really can't see any way, with current trajectory, that college isn't substantially 'free' in 15 years.
So if I end up with hundreds of thousands of dollars to be used specifically for education, do you think they'll wave penalties to use for other purposes? I'm assuming the kids aren't in private university. But even private schools would have to drop cost to compete.
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Imo if we reach free college, I guarantee you the libs in charge aren't about to let you 'rich people' with 529s simply use the money for other purposes. I think There's a Better chance you get it confiscated to pay for other people's kids or counted toward your net worth and taxed at 60% to teach everyone a lesson on equality.Esteban du Plantier said:Aust Ag said:
we were sort of banking on another "situation" that would help us pay, but that hasn't happened yet.
Assuming you're talking about free college, but I could be way off. Maybe you're investing in the lotto.
But I have toddlers and really can't see any way, with current trajectory, that college isn't substantially 'free' in 15 years.
So if I end up with hundreds of thousands of dollars to be used specifically for education, do you think they'll wave penalties to use for other purposes? I'm assuming the kids aren't in private university. But even private schools would have to drop cost to compete.
Ok, in your opinion, do we reach free college?
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It's not free when someone is paying for it....more tax.
No, but I also think we are about to see a fundamental change in the ways colleges are run. Thousands of kids in an online class mean much lower expenses per student. We'll see if that translates to lower costs.Esteban du Plantier said:
Ok, in your opinion, do we reach free college?
All animals are equal, but some animals are more equal than others
Where do the grandparents reside? Do you expect they will be making future contribution?
If they live outside of Texas, look at their state's 529 treatment.
If they live outside of Texas, look at their state's 529 treatment.
No way. They'll need to bloat their administrations with Vice President of Online Learning, etc.Mtn_Guide said:No, but I also think we are about to see a fundamental change in the ways colleges are run. Thousands of kids in an online class mean much lower expenses per student. We'll see if that translates to lower costs.Esteban du Plantier said:
Ok, in your opinion, do we reach free college?