529 Plans

[busterbrown16]

I know this question has been asked before, but I cannot find the thread. I frequent the board pretty often and have not seen it asked recently, but if it has, I would like to apologize in advance.

Have my first child on the way. Due in a couple weeks. Would like to start thinking about college and would like to go with a 529 plan. What plans do you use and why? Are there better providers than others? Are there better funds then others?

Thanks in advance for the responses.

 

[zork]

I'm no expert on 529 plans. You might check out the Coverdell Education Savings Account option too to supplement anything you will be using for education expenses from private school to supplies for school.(from what I understand)
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[zork]

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Of course the 529 plans are numerous and you are wise to ask for help figuring them out. I had heard Utah had a good one but that was over a year ago.

Here are some articles from Clark Howard on 529's:
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[busterbrown16]

Thanks zork. I have found similar information as well. Utah appears to be the best option. Lowest cost and best options as far as investing.

I was really looking to see if anyone had any personal experiences, words of caution, etc. from there own 529 Plans. I guess not many people do these types of plans, but thought I would give this a shot.

Also, one of my biggest questions is: if you are a Texas resident, is there a benefit (tax wise or otherwise) in investing in the Texas 529 plan versus the Utah 529 plan. All of the websites give the same or similar words of caution that you may get some tax benefit by using your state's 529 Plan:

"If you are not a Utah taxpayer, please see if the state where you or your beneficiary live or pay taxes offers a 529 plan that provides tax or other benefits not otherwise available to you through UESP."

So far, I have not been able to determine if there is some benefit for using the Texas plan.

 

[bullzak]

Generally the tax benefits re: different state options is in regard to state income taxes.

I live in Illinois and if I use the Illinois 529 my contributions are deductible against Illinois state income taxes. Not a lot, but something.

 

[Clarence Iba]

It does depend on what state you live in for tax considerations. If Texas, the Nebraska or Utah plans are pretty solid.

 

[busterbrown16]

Thanks for the information guys. You are correct, I talked to the Texas 529 plan people and they said there is no tax benefit in Texas for using the Texas 529 plan. It is only in states with a state income tax.

 

[bullzak]

Morningstar used to do a nice 529 ranking of plans and expenses and I think it was on their free content area. Might take a look on their website.

 

[BigXIIHorns]

I use Utah for both my girls. It's easy and works well. They have a very low cost so most of your money is invested. It makes no sense to use Texas's plan. High fees and no tax benefits since Texas does not have a state income tax. I would recommend Utah's 529 to anyone.

 

[busterbrown16]

BigXIIHorns - I think I am going with the Utah plan. If you don't mind me asking, which of the investment options did you choose? Is there a more popular approach out of the 12 options that most people go with?

Thanks for the info.

 

[CottonEyedHorn]

WV's plan is great. Really low fees.
The Link