Hi Fam! Anybody has experience with 529 plans? Starting to explore and wanted to see if there are any dads/moms out there who have invested - pros and cons and recommendations? Appreciate it!

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Pros: Great vehicle for tax-free growth for your kid’s (or grandkid’s, niece’s, nephew’s) education expenses - especially if you consider the main alternative is a general brokerage account subject to capital gains taxes.

Cons: It’s possible to “overfund” and have too much invested relative to actual needs (but then again you can redirect to a grandkid, niece, nephew). The rules only allow annual withdrawals up to the tuition, room & board, etc that the school publishes.

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Agreed. Unless you are already taking full advantage of your other tax advantaged options (401k, IRA, Roth IRA, even HSA, etc.) I would be hesitant to tie up funds in a 529 which will have more restrictions and fewer beneficiary options.

I believe ours is one America. It’s done well. Don’t forget to look at the independence rules

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No assistance on 529

I work in NY, so I have a 529 plan through them as contributions are tax deductible. It is worth looking up if your state offers tax deductions/tax credits. If so, and they have investment options with reasonable expense ratios, then put your money there.

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I am looking into an issue wherein if you are going to also apply for financial aid, 529s count differently if they are in your name vs the grandparents or someone else’s. E.g. in one of those two cases you will be eligible for less loans/grants than the other. I don’t know the details but that is something to look out for.

I've had neighbors tell me that if the 529s are in the name of the parent(s), the 529 counts as an asset for all kids, limiting their ability to apply for aid. Really painful if you're saving for multiple kids to use. Shouldn't be an issue for your grandkids, but something to consider when you are a parent.

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Also note that 529s can be used to fund K-12 now so if you get a tax break and are paying for private school in any case you might want to run it through a 529

Anyone familiar with choice between Individual vs Custodial for the MA 529 thru Fidelity? I have two daughters I’d like to set up as beneficiaries of separate accounts. Other than custodial being locked in to one of them, I don’t know if I get the benefit. Is the individual beneficiary subject to the gift tax?

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