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 Post subject: Should I get my kids a 529?
PostPosted: Mon Mar 18, 2013 6:01 am 

Joined: Wed Oct 17, 2012 7:45 am
Posts: 4
To start with, allow me to explain our situation. We have three kids, with one on the way. In August, we will have four kids, our oldest will be 3 years and 2 months. Yes, that will be essentially three toddlers and a newborn in the house. I am a stay at home dad with a Masters of Divinity. My wife is a Physical Therapist. In other words, we have lots of student loans that we are paying off, plus a mortgage. All three of my kids currently have a Savings Account with about 1.5 to 2K in them. This is mainly from gift money given to them. I have been going back and forth about whether to put this money into 529 plans for them, or not. I would not invest all of it if I did, but the main thing keeping me back from doing so is recognizing the way in which the landscape of education is changing. The educational landscape is vastly different from what I was looking at 13 years ago when I went to college, and I know it will only change more so within the next 16 years, when my oldest will go off to school. In the long run, the tax benefits of the 529 plan seem great, but I am wondering if it is not best just to keep the money in a regular savings account for now? Any thoughts?

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 Post subject: Re: Should I get my kids a 529?
PostPosted: Mon Mar 18, 2013 9:13 am 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1655
Location: Seattle, WA
529's can usually be transferred between kids, or from a kid to a parent, or to a niece/nephew/etc. However, if the money is currently in accounts in the kids' own names, then each would have to be transferred to a 529 in the kid's own name as well (each kid would be both the owner and beneficiary of their account). In that case, you wouldn't be able to transfer/combine the amounts.

What do you think the odds are that the educational landscape will change that much? Or that your kid(s) won't go to college for some reason? (Either individually, in the case that they have to have separate 529s per prior paragraph; or if not, then the odds that none of them will go to college.) Unless you think that the odds of one or both of those circumstances are greater than 90%, it still makes sense to put money into a 529.

Do you plan to have more kids?

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 Post subject: Re: Should I get my kids a 529?
PostPosted: Mon Mar 18, 2013 9:52 am 

Joined: Wed Oct 17, 2012 7:45 am
Posts: 4
To answer some of the above concerns, and give more information, my wife would like to stop after number four arrives in August, but we are not planning on doing anything permanent as of yet. The money is currently in a joint banking account, between my wife and the kids (three separate accounts), so I do not think the transfer issue applies.

As far as none of my kids going to college, I think that is a far off shot, given my wife and I's educational background. I would think at least one of the would go to college. If all of them go to college, then at one point, all four of them will be in college at the same time (financial nightmare!).....

As far as the changing landscape, I have seen it get harder and harder for college grads to get any sort of job without prior experience. Thus, why not get an entry level position that does not need education, and make sure it is with a company that is willing to pay for education? Either that or military service, especially in the current economy. And who knows when the current economy will actually start to pick up more steam?

In then end, I would not want to put all of the money in 529's... so I would then have to figure out percentages.....

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 Post subject: Re: Should I get my kids a 529?
PostPosted: Mon Mar 18, 2013 10:21 am 

Joined: Fri May 04, 2012 2:23 pm
Posts: 1039
I think 529's make sense, and I will encourage my childrens to go straight to college, and have planned for them to do such.

A lot of has to do with what you study. I studied engineering. I got a good job coming out of school. I only went 4 years. And I make more money than most people with graduate degrees.

Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

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Good to see you back, I was starting to miss your incisive commentary!

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