529 Plan-Where to Start

[MrPTato]

So I have a 3yo and a 2m old and want to start a college savings plan for them. I already have an account (savings) with 2k for my 3yo and thinking I should move that to a 529 and also start one for my 2m old.

For those that have them, where should I start looking? Are they all the same? Do I need to play around with stocks/funds, or can I just deposit and forget about it? Any good institutions?

Thanks for any help you can provide.

 

[havaneselover]

What state are you in? Some times there are tax advantages to using a state plan (in VA you pay no state income tax on the first $4k/account/year). Otherwise I would check out Vanguard.

 

[ctinct]

Clark Howard has a pretty good explanation and guide on his website, Clark.com. On the top of the page look under topics ( I think, or a word that is similar. I looked a while ago but I seem to be having a brain freeze.) Then go to education and look there. When I looked it was the first article.

 

[MrPTato]

What state are you in? Some times there are tax advantages to using a state plan (in VA you pay no state income tax on the first $4k/account/year). Otherwise I would check out Vanguard.

I'm in New Hampshire and we do not have an in income tax, if that matters.

 

[havaneselover]

So I'd go with Vanguard (low fees) and put it in something with appropriate risk for their age (so the longer the horizon the more risk you can take).
https://investor.vanguard.com/529-plan/age-based-options

 

[mmfox316]

Some employers will do payroll deduction into them. I did this with mine. It is the best thing I ever did. Because of it I can take a cruise ever year even with a kid in college. Even if it is just $25 a paycheck try to do it. You will be so happy you did.

 

[dmensing]

Savingforcollege.com has a lot of good information.

 

[tcufrog]

We have one plan for our 5 and 9 year old. Our investment advisor recommended it so we could be more flexible with the disbursement of the money. Some states have college savings plans that can only be used at the state's colleges. Some of them go further but then you're really limited on which schools your child can go to.

 

[havaneselover]

We have one plan for our 5 and 9 year old. Our investment advisor recommended it so we could be more flexible with the disbursement of the money. Some states have college savings plans that can only be used at the state's colleges. Some of them go further but then you're really limited on which schools your child can go to.

In VA our prepaid plan is for state colleges but can still be used elsewhere. Our non prepaid plan is for any college. Advantage of prepaid is you lock in tuition rates. Did this about 8 years ago and it's a good deal when tuition is increasing as fast as it is. Also in VA we have so many state schools that I'm not concerned about limiting my kids' choices but not every state has so many good options.

 

[tcufrog]

Some prepaid plans refund the initial investment if you don't go to a state college in the state where the plan was started but don't give you any interest. I'm not opposed to them but you need to fully understand the particular plan's limitations before you go that route.

 

[MrPTato]

Thanks guys for the help...this info will give me a good start!