Are you happy with your 529?

[spicycrab]

I have all of DDs college savings in the bank. I'm pretty nervous about opening 529 so I thought I ask for input. I get that it is like any investment and is designed to be long term, however when the market crashed it seemed like people lost thousands. I would hate to count on money and a critical time and it not be there...

What is your opinion? Is it really making you money? Thanks!

T
Thanks

 

[Lisa71]

We have one for each kid and while it is not making a lot of money we are also not being aggressive with it. The thing we like is it does not count against the child when they apply for student aid or scholarships while a regular account does.

 

[Lisa71]

Btw when they get close you would move to the most secure investment.

 

[crisi]

I made $12,000 on mine last year. Not including deposits, just in gains, dividends and interest.

As the kids get older, the investments get more conservative. My son starts high school next year and he will be almost all bonds at that time.

 

[ilovemk76]

We have one for our Goddaughter. She is only a year old. We have it with Vanguard. In a year and three months she has made 20% return. She is in the moderate growth fund. As she ages, every 5 years, the fund gets more conservative.

 

[MomToOne]

I have a Utah 529b for DD12. I opened it when she was around 7 years ago. We live in CA but I picked the Utah fund because it is consistently highly rated and uses Vanguard for the funds I want, which generally has some of the lowest fees. Depending on your state, you may get a tax break for investing in your state's plan but unfortunately that's not the case in CA....

The Utah plan has a FDIC Insured Saving Account option, if you are completely risk adverse. They also have bond funds. So you don't have to invest the 529 funds into the stock market if you don't want. I assume other state plans have similar choices.

While I lost money during the economic downturn, I've also made back a lot of that last year and this year, and am up overall by much more than I would have been had I just kept it all in a savings account all this time.

 

[ICF]

Yep, really like mine.....the fact that the state of IN gives a 20% tax refund on the 1st $5K that you contribute doesn't hurt either. That makes it have an instant 20% return.

 

[BridgetBordeaux]

I understand why you feel uncomfortable, so it would be best if you did some more research. Websites run by Clark Howard or Dave Ramsey come to mind. Money magazine, Kiplingers also would be good sources of information.

For a 10-15 year time horizon, the experts want you to have a major part of your money anywhere but a bank account.

As previously mentioned, many 529 plans gradually move the investments into more conservative funds as the child hits 15,16,17, years old.

 

[RCBA]

We are not happy. It was poorly managed and lost several thousand dollars and lost and lost and lost. 8 years later it is only gained $1,500 over our initial investment. The money would have done better in our savings acct.

 

[dcfromva]

I have all of DDs college savings in the bank. I'm pretty nervous about opening 529 so I thought I ask for input. I get that it is like any investment and is designed to be long term, however when the market crashed it seemed like people lost thousands. I would hate to count on money and a critical time and it not be there...

What is your opinion? Is it really making you money? Thanks!

T
Thanks

spicycrab,
I notice that you are from VA which is where I live, too.
The VA 529 plan has many, many options some of which are guaranteed. In addition, you can write off from VA state taxes up to 4,000 per year per account with unlimited carryover for amounts that exceed 4,000.

We used both VPEP and VEST for our DSs college. (They are now called Virginia 529 PrePAID and Virginia 529 inVEST--link to http://www.virginia529.com/ )

Lucky for us, DS elected to go to an in state college. DS graduated last year. We used VPEP for tuition and fees. We invested approx 18,500 for the 4 year VPEP plan and the payout was over 42,000. The VPEP (now called prePAID) plan guarantees you will get back at least what you paid into the program:

What if my contract payments plus reasonable rate
earnings are more than the tuition and mandatory
fees at my school?
VPEP will automatically calculate your benefits each year
that you attend college to determine if you would receive a
higher return from your VPEP contract by selecting the alternate
payment (described below) instead of payments under
the formulas defined in VPEP’s Master Agreement and in
this document. If it is in your best financial interest to select
the alternate payment, we will notify you of this option over
the summer.

While you won't lose any money on the prePAID, your returns will be less than stellar if your child goes out of state or to a private college so that is a risk.

We used the VEST (now called inVEST) for DSs room and board and books. The return on this was pretty dismal because we opened the account about 4 years before he went to college. Most of the time, his funds invested in the Piedmont fund IIRC. This was 100% fixed income/stable value. While earnings weren't great, I believe we earned close to 4K over the life of the investment.

You can inVEST in an age evolving plan, assorted Vanguard investments, fixed income, etc.. There are many choices that could be matched up with your risk tolerance.

And, there is also a new program that was introduced just last year called College Weath. Basically, there are two banks through which you can sign up (BB&T and Union First Market) and they pay interest.

 

[goodeats]

We have our DDs' through Vanguard. I'm not even sure which state's plan it is, but they have done quite well.

Like with retirement, it's important to be more conservative as you get closer to needing the money.

 

[Crystal824]

We started one for our DD when she was born through Vanguard. She is now 2 1/2. We have it set up to be aggressive now, but will make it more conservation as she ages. We are very happy with it.

 

[HM]

I have all of DDs college savings in the bank. I'm pretty nervous about opening 529 so I thought I ask for input. I get that it is like any investment and is designed to be long term, however when the market crashed it seemed like people lost thousands. I would hate to count on money and a critical time and it not be there...

What is your opinion? Is it really making you money? Thanks!

T
Thanks

Well, we were one of those that lost a ton of money in our account during the crash. It wasn't until late 2010 that we finally got back over the amount we had contributed ourselves. We continue to contribute at the same rate and have changed to the least risky investments within the 529 (which of course make less). We would have made more money by keeping it in our savings.

We counted on this money to pay for most of children's four years in school. At this point, we're only getting about two years for son (started Fall 2011 and we started out paying OOP instead of using 529 money) and our daughter starts school next Fall. I think we'll get three years for her. It's a disappointment.

 

[spicycrab]

We have one for each kid and while it is not making a lot of money we are also not being aggressive with it. The thing we like is it does not count against the child when they apply for student aid or scholarships while a regular account does.

Does it count against them if the account is mine?

 

[spicycrab]

spicycrab,
I notice that you are from VA which is where I live, too.
The VA 529 plan has many, many options some of which are guaranteed. In addition, you can write off from VA state taxes up to 4,000 per year per account with unlimited carryover for amounts that exceed 4,000.

We used both VPEP and VEST for our DSs college. (They are now called Virginia 529 PrePAID and Virginia 529 inVEST--link to http://www.virginia529.com/ )

Lucky for us, DS elected to go to an in state college. DS graduated last year. We used VPEP for tuition and fees. We invested approx 18,500 for the 4 year VPEP plan and the payout was over 42,000. The VPEP (now called prePAID) plan guarantees you will get back at least what you paid into the program:

While you won't lose any money on the prePAID, your returns will be less than stellar if your child goes out of state or to a private college so that is a risk.

We used the VEST (now called inVEST) for DSs room and board and books. The return on this was pretty dismal because we opened the account about 4 years before he went to college. Most of the time, his funds invested in the Piedmont fund IIRC. This was 100% fixed income/stable value. While earnings weren't great, I believe we earned close to 4K over the life of the investment.

You can inVEST in an age evolving plan, assorted Vanguard investments, fixed income, etc.. There are many choices that could be matched up with your risk tolerance.

And, there is also a new program that was introduced just last year called College Weath. Basically, there are two banks through which you can sign up (BB&T and Union First Market) and they pay interest.

Thanks!

 

[TheRustyScupper]

1) Our granddaughters live in Ohio.
2) We used the Ohio College Advantage program.
3) We took the "guaranteed" program.
. . . you invest in "points", not just dollars
. . . example: state universities need 100 points per year
. . . example: junior colleges need 50 points per year
4) REGARDLESS of economy, you get the point value.
. . . whether college costs go up astronomically
. . . whether the dollar shrinks like a dried up leaf
5) So, even if DE-flation, you are covered and their schooling covered.
6) We invested approx. $3800 per granddaughter.
7) They now have a guaranteed 4-year university tuition.
. . . tuition
. . . books
. . . room & board
. . . student fees (even laptops if required)
8) So, are we satisfied? YOU BETCHA.

NOTE: The money invested comes out even if they choose
out-of-state schools, trade schools, or no-school. Of
course, the interest rate to cash-out or to use for non
Ohio schools is minimum.

 

[Honeymooner04]

We also have the Ohio 529 plan and have been super thrilled with it. The return has been ok and the user functionality of the website is great.

 

[Mrs. Ciz]

1) Our granddaughters live in Ohio.
2) We used the Ohio College Advantage program.
3) We took the "guaranteed" program.
. . . you invest in "points", not just dollars
. . . example: state universities need 100 points per year
. . . example: junior colleges need 50 points per year
4) REGARDLESS of economy, you get the point value.
. . . whether college costs go up astronomically
. . . whether the dollar shrinks like a dried up leaf
5) So, even if DE-flation, you are covered and their schooling covered.
6) We invested approx. $3800 per granddaughter.
7) They now have a guaranteed 4-year university tuition.
. . . tuition
. . . books
. . . room & board
. . . student fees (even laptops if required)
8) So, are we satisfied? YOU BETCHA.

NOTE: The money invested comes out even if they choose
out-of-state schools, trade schools, or no-school. Of
course, the interest rate to cash-out or to use for non
Ohio schools is minimum.

spicycrab,
I notice that you are from VA which is where I live, too.
The VA 529 plan has many, many options some of which are guaranteed. In addition, you can write off from VA state taxes up to 4,000 per year per account with unlimited carryover for amounts that exceed 4,000.

We used both VPEP and VEST for our DSs college. (They are now called Virginia 529 PrePAID and Virginia 529 inVEST--link to http://www.virginia529.com/ )

Lucky for us, DS elected to go to an in state college. DS graduated last year. We used VPEP for tuition and fees. We invested approx 18,500 for the 4 year VPEP plan and the payout was over 42,000. The VPEP (now called prePAID) plan guarantees you will get back at least what you paid into the program:


While you won't lose any money on the prePAID, your returns will be less than stellar if your child goes out of state or to a private college so that is a risk.

We used the VEST (now called inVEST) for DSs room and board and books. The return on this was pretty dismal because we opened the account about 4 years before he went to college. Most of the time, his funds invested in the Piedmont fund IIRC. This was 100% fixed income/stable value. While earnings weren't great, I believe we earned close to 4K over the life of the investment.

You can inVEST in an age evolving plan, assorted Vanguard investments, fixed income, etc.. There are many choices that could be matched up with your risk tolerance.

And, there is also a new program that was introduced just last year called College Weath. Basically, there are two banks through which you can sign up (BB&T and Union First Market) and they pay interest.

I am also from Virginia and am a BIG fan of VPEP - the prepaid 529. DS is a soph in HS, DD will be starting HS next year. I wanted to do the VPEP back in 2001. Tuition & mandatory fees for 4 years for a kindergartener were $15,500. I couldn't get my husband to do it. When I brought it up again in 2004, the 4 year tuition and mandatory fees prepaid price had gone up to $31,000 for a kindergartner. DH finally saw the light...if it doubled once it would probably double again. We cashed out the kids' investments, used our tax returns and some inheritance money and bought two accounts, paying most of it up front to maximize the savings.

Fast forward to today - DS is looking at colleges. DH & I both went to William & Mary so we know that Virginia has many nationally ranked public schools to choose from. DS is an excellent student so he should have his choice of Virginia schools. Our local newspaper ran an article about William & Mary's tuition rates this past Saturday. These are published rates that will be in effect for us:

Class of 2019 (DS's class)
Tuition: $13,978
Mandatory Fees: $4,792
Room & Board: $10,000
Total per year: $28,770
Total for 4 years: $115,080

Tuition & Mandatory fees for 4 years is $75,080. We paid only $31,000...a savings of $44,080. Am I happy - YES!!!! Do I think I could have done this well in a regular 529 - NO!!!

 

[silmarg]

I am in the NY 529 plan since the the DDs (now 11 and 13) were born. Each kid $5k/year. Fully deductible on NY return. In total they are now worth $190k - no complaints.

Whats interesting is that the younger DDs acct is worth more than the older. The older one had $ put in right before the internet bubble. And I decided to be more aggressive w the younger ones investment choices

 

[meddockian]

So far, we are happy with ours. We opened a MOST (Missouri 529) plan for our DS (4) and DD (1). We selected the moderate investment along with it being based on age.