Comments on: 529 Plan and College Savings: Should We Contribute?

By: PT

PT — Thu, 01 Jan 1970 00:00:00 +0000

@amiel – definitely open one for each child.

By: amiel

amiel — Thu, 01 Jan 1970 00:00:00 +0000

Should I open 2 different 529 accounts for each child or should I have one account?

By: PT

PT — Thu, 01 Jan 1970 00:00:00 +0000

@Mary – How old are your grand kids? What type of investments did you have in the 529? Mutual funds?

I would advise heavily against pulling your money out of the 529 now. You’ll only seal you fate and your losses will become realized.

If your grand kids still have a few more years before they’ll need that money, then just sit tight. The market will recover and it seems we’ve already hit the low and are returning to a normal upward trend.

Besides, Money Market Funds and CDs aren’t paying that much these days.

Historically, mutual funds/stocks have out performed any type of investment. Stick with them as long as you still have some time…more than a couple of years.

By: Mary Webster

Mary Webster — Thu, 01 Jan 1970 00:00:00 +0000

We opened a 529 college fund for our great grandchildren with $20,000 each child three years ago. Was doing fine until last fall (2008) and lost all interest made plus $200 on each fund. Then March we received statement for 529, each child…it is now worth $13,000. I am now in the process of thinking to move it to a CD or money market. Certainly not making any money staying in the 529 fund.

By: MITBeta @ Don't Feed The Alligators

MITBeta @ Don't Feed The Alligators — Thu, 01 Jan 1970 00:00:00 +0000

We have a 529 plan for our 2 year old and we're just about to open a 2nd one for our 2 month old. These plans are funded from gifts to the girls (Christmas, birthday, special events, etc.) and from the cash back credit card rewards. These two source have allowed us to contribute over $2000 to daughter #1's account in just over 2 years.This money doesn't flow through our budget at all, so it doesn't impact our retirement savings in any way.

By: Fabulously Broke

Fabulously Broke — Thu, 01 Jan 1970 00:00:00 +0000

I agree with Ashley. If I can save for my future kids without hurting my retirement, I will.

If not, they’ll have to go at it on their own with some help from me.

I also don’t plan on paying for their education 100% outright. I think they should learn how to pay off debt as an early financial life lesson, but I wouldn’t let them cripple themselves in doing so (like bankruptcy).

I think paying off my own student loans and my debts made me a stronger person than if my parents had paid for everything.

A little fear is a good thing.

Fabulously Broke in the City
“Just a girl trying to find a balance between being a Shopaholic and a Saver.“

By: Scott @ The Passive Dad

Scott @ The Passive Dad — Thu, 01 Jan 1970 00:00:00 +0000

We have 529′s set up for our kids and also contribute to our retirement fund. I agree that our own retirement and emergency savings account should come first before any college savings plan.

By: FFB

FFB — Thu, 01 Jan 1970 00:00:00 +0000

As we have been contributing to our kids’ 529 plans we have cut back recently to help cover other expenses and to help get ready to possible buy a house. Having money for your kids is great and any bit that I can help I will but having a good home for them is important for us too.

And I agree with comments above in that you need to make sure your retirement is funded first. It’s much easier for your kids to pay for school themselves than to support you in your retirement years.

If you can contribute though, it can be a great plan (depending on state).

By: courtney e.

courtney e. — Thu, 01 Jan 1970 00:00:00 +0000

I thought everyone’s comments were interesting, and I’m relieved to see that not everyone contributes to a 529. We do contribute to a 529 for both of our kids, and every year on their birthday, our kids’ grandparents give them college fund money. We don’t put it before our IRAs/401Ks, but for us, the 529 is important. There’s no telling how expensive college will be once my kids are to that point and we’d like to help as much as possible.

By: Alan Hammond

Alan Hammond — Thu, 01 Jan 1970 00:00:00 +0000

Congratulations on the new baby!

I just followed you on twitter, read and commented on your blog, great stuff!

I’d love to have you guest post on my blog, http://recessionproofinglife.blogspot.com. The blog is similar to yours. I seek to balance between debt reduction and finding new income streams/small business, but find myself tending more toward the latter. Anything along the lines of what you have on your blog will most likely fit well with my blog.

Let me know if you’re interested.

Keep up the good work and keep changing lives!
Alan

Alan