Info on 529 College Savings Plans

Hi B.,

I have one of these plans for my daughter and I opened it myself after reading all the information. I opened the plan online and have set up automatic deductions for monthly contributions towards my daughter's education. The plan has various benefits and the money you invest is state tax deductible. I did not feel the need to consult with a financial planner, but you might and I believe most CPAs or financial planners should be able to help you as it is a relatively straight forward process. Good luck!

This is the official Pennsylvania 529 website:

http://www.makecollegepossible.com/

We have a 529 for our son through the state (our financial advisor set it up, but you can totally do it yourself.)

Weighing all the relative tax advantages, a PA 529 is the best bet for us.

we use our finance guy, he is out of philly i believe, its not near us, but he was a friend of the family so we use him. not sure if that is near you. its pretty simple whenever we get money for gifts for her we just call him up and he withdrawals it from our account and puts it into her 529. (we put it in our checking account and he takes it out) other than that we have a standing monthly withdrawal that we ourselves have him put in there for her regardless.

Hi B.!
Just really wanted to encourage you to start a 529 Plan NOW! We waited til our son was about 4. The stocks have all recently been tanking, but remember, it's a looooong term investment. Your bank probably has a financial advisor that can set you up. Good luck!

Go to your local bank and talk to a financial advisor there. They may be able to recommend someone for you that could take care of your needs. At least they will recommend someone with a good reputation or may be they me be able to open some type of account for your child. Good luck

I have one of these plans for my 3 1/2 year old son. I opened it up when he was 1. I'm expecting another baby in early December and plan to open up his account right away. I used a direct buy 529 plan which all states offer. I just went directly to the plan website and opened online rather than purchasing from a finance guy since all states offer plans that you can just sign up for directly on your own.

From the research I did when I opened my son's account, I found that the fees charged by 529 plans sold by brokers were substantially higher than those for the direct sold plans. The brokers could take anywhere from 1-6% of the total money you are investing for sales charges on top of the expense ratios for the funds themselves. I've never read anything that shows that funds sold by financial planners outperform the ones you can get yourselves since you always have to pay extra fees to the planner so you are always having return reduced by the percentage they take. You can go to the following website to do research on the funds and get additional information on the various 529 plans offered by all states: http://www.savingforcollege.com/

At the time I started a 529 plan for my son, the PA plan was not very good and had relatively high fees. I signed on for the Nevada 529 plan which is managed by Vanguard and has exceptionally low fees and has age based funds available to make investing easier. At the time I signed up, Pennsylvania also started permitting deduction for 529 contributions up to $12,000 for plans in any state. Pennsylvania has since changed to have Vanguard managing their 529 plan. The expense ratios are a little bit higher than that of the Nevada plan, but the initial investment is cheaper ($25 for PA versus $3000 NV, although you can open the NV for less, you'll just have to pay a surcharge until the balance reaches $3000). Also, Vanguard has some good tools on their website to allow you to compare plans from the different states and their costs: https://personal.vanguard.com/us/whatweoffer/college?Link...
I use funds that are auto-adjusting by age to simplify things rather than having to monitor a lot of different funds.

All the advice you've received so far is great - Marsha provided some good websites, too. I just (finally) opened a 529 two weeks ago for my now two year old. To summarize, PA will let you take a tax deduction for a 529 that you open with any state; however, that may not always be the tax law. So, while I found that Utah charges the lowest fees, I still opened my plan directly with PA. There is a very low minimum to open ($25) and a good selection of Vanguard managed products for you to choose from. There are also age-based fund options, which take the guess work out of it for you. And that should make you feel comfortable setting up the play yourself, rather than through an advisor who will charge you extra. But, if you already have an advisor that you really like, I don't think it would hurt to check with him/her as well. Just educate yourself and ask questions. Good luck, and congratulations on your son!

Here is some essential reading - one of the best baby gifts we received:

"Parent Savvy"

http://www.nolo.com/products/parent-savvy-PRNT.html;jsess...

You will need a minimum amount to open it, so we started a savings account in the meantime until we hit the minimum. And a 529 is an investment vehicle like anything else - it will go up and down. But there are a lot of tax benefits to it in the long term, so do your reading:)

I might be mistaken on this, but I believe one of the pitfalls of the 529 is that the money saved is only payable to a college/university--so if your son decided not to attend, I'm not sure he'd be able to withdraw the funds very easily--maybe there are penalties, etc. I'm sorry I'm so fuzzy on the details, but this is something to think about. Like with all investments, just in case, best to not put all your money in one place.

Hi B., if you want i can send you a private message. My husband is a local Financial Planner. We live in Dresher, PA if that is close to you. He can setup a 529 plan for you.

we opened ours through Fidelity

I am not sure about the 529 plan, but I can tell you that our advisor told us we need to save 519.00 a month per child from BIRTH til they are 18 in order to pay for a 4 year college. YIKES!