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529 Plans

Old 03-04-2009, 06:16 AM
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Anyone else investing in a 529 Plan for their childs college? My wife and I have been for about 2 years but obviously due to the state of the "Market" and BO's "plan" for the nation in the next 4 years, we fear that with regard to the market, it will only get worse due to corporations being taxed to the hilt, more job cutbacks, etc.

Are you looking at alternatives for college funding?
Old 03-04-2009, 06:37 AM
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i am...had it in stocks...but after seeing what ive set aside for them dump 50%, i'm not making all future contributions go into cash !! cash is king !! all my 429, sep ira, traditional ira, 529 all into cash !!! barak obama is destorying this country beyond anyones imagination...he's taxing the hell out of people, the market is crashing, down 23% since he took office, and he's going to tax the people who contibute most to this country, i'm planning to dump both of my houses (worth over 1.2 million) if he decides to take away my mortage interest deduction on top of raising my federal tax bracket....there is no reason for me to work my azz off to pay it all to the governement....he has taken away my reason to work hard...he is turning this country into a socialist society, there is no reason for me to work hard ! not when the government is going to take it away..
Old 03-04-2009, 06:55 AM
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If you choose the guaranteed option (attend a MD state school) you are locked-in. It shouldn't matter how the fund performs

You also get a tax break on the contribution irrespective of the market

btw - I'm in the MD 529 plan for both kids

Last edited by Elusive; 03-04-2009 at 06:57 AM.
Old 03-04-2009, 07:15 AM
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520 is long term investment too... If you have 10-15 years before college age then I would keep doing what your doing, you are buying cheaper stocks now and in 10-15 year the hope is that the market would be back up.

Also the 529 plan that I am using (i think most are this way) are age/risk correlated so that the risk goes down as the child gets closer to college age.
Old 03-04-2009, 08:05 AM
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I have a $500,000 life insurance policy I over fund so it grows tax free. I needed the life ins and I also needed to save for my daughters college. When she gets of age I'll take the needed cash from the policy and reduce the life insurance. As long as I keep the policy I will not have to pay any taxes on its earnings or on the cash I take. I think it is curently paying 5.50 % which is not too bad and is guarantted to never fall below 4.50%.
Old 03-04-2009, 09:25 AM
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yeah...i'm in the maryland 529 through t rowe...the investment plan option with a portfolio date set for the first year the kids will enter college. however, i'm thinking the pre-paid tution may actually be the better option...it guarantees you tution to any university in the state, and will give you an equivalent amount if your kids decide to go out of state.

college tution has been outpacing inflation for a long while. that could change but i doubt it...so selecting the pre-paid tution option vs. the investment plan option gives you guaranteed growth. sure wish i'd have thought about it that way 8 years ago!!!

Old 03-04-2009, 09:47 AM
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Originally Posted by happyjack92 View Post
...

college tution has been outpacing inflation for a long while.

You are right. The cost of education is one of 8 bubbles in line to pop. It is considered less significant, but it is a bubble.
Old 03-04-2009, 09:54 AM
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I have 3 529 plans through Vanguard - College Savings Iowa. I'm beginning to re-think the 529 investment strategy. Since my IRA's are dwindling away I need to put a little focus on myself (kids are young).
My approach may be - believe it or not, real estate! I'm in SE PA and the real estate market isn't too bad. My thoughts are to buy a condo/townhouse or two. Take 15 mortgage (put 25% down) and rent them out. If the rent pays the majority of expenses and by the time my kids are ready to go to college, they'll be paid off. At that point I can re-sell or re-mortgage! I'm very conserative and do my homework. This seems like a viable option in todays market!
Old 03-04-2009, 10:06 AM
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Originally Posted by sea nymph View Post
I have 3 529 plans through Vanguard - College Savings Iowa. I'm beginning to re-think the 529 investment strategy. Since my IRA's are dwindling away I need to put a little focus on myself (kids are young).
My approach may be - believe it or not, real estate! I'm in SE PA and the real estate market isn't too bad. My thoughts are to buy a condo/townhouse or two. Take 15 mortgage (put 25% down) and rent them out. If the rent pays the majority of expenses and by the time my kids are ready to go to college, they'll be paid off. At that point I can re-sell or re-mortgage! I'm very conserative and do my homework. This seems like a viable option in todays market!
i wasn't sure about your claim on SE PA real estate, but it does look like they're closer to the bottom than most others...

some interesting data here--->http://www.goppelt.net/phpi/phpi3q08.pdf
Old 03-04-2009, 10:19 AM
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NOT Philly - They should just take a bomb and destroy the city!
I'm talking about the suburbs - Bucks, Montgomery, Chester Counties.
Here we're sandwiched between NYC and Balt./DC. There is a lot of money (use to be) in these areas, desirable school districts and decent jobs - at least for now!
Old 03-04-2009, 11:41 AM
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Thank you guys! Very intersting and useful information, as always.
Elusive, Opey couldn't make it monday but Barney showed up yesterday.
Old 03-04-2009, 01:14 PM
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If it means anything, the market value of our plan is worth 2/3 of what we have put in thus far. Might be time for a change.
Old 03-04-2009, 01:32 PM
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I'm considering going into the prepaid. I have one child who is a freshman in HS. It guarantees tuition costs (but not fees) at state universities, and a guaranteed return of 4% if you use the funds for an out of state university instead of in state. I think maybe I'm satisfied with a tax free 4% for the next four years. Then again, maybe I should put it in copper.
Old 03-04-2009, 01:59 PM
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Originally Posted by itwonder View Post
I'm considering going into the prepaid. I have one child who is a freshman in HS. It guarantees tuition costs (but not fees) at state universities, and a guaranteed return of 4% if you use the funds for an out of state university instead of in state. I think maybe I'm satisfied with a tax free 4% for the next four years. Then again, maybe I should put it in copper.
Funny you mention copper. Do you know who owns the largest copper mine in the world? China.
Guess who just, over the summer, bought the 2nd largest copper mine in the world. you guessed it. China.

I hope they make better copper than they do drywall.

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