Lots of 529 questions

[Rambo]

1. If one lives in NJ and works in NY, is it no brainer to go with a NY 529 or should other states be considered?  Overall, there is minimum benefit as the tax credit gets transferred over, but not fully.

2. What are the collective's thoughts on a 529? Pros and cons?

3. When opening an account, does one need to designate who it is for or can one put their own name i.e. if no child?

4. Anything else to consider?

 

Thanks.

[VagabondMD]

1. I don't know specific NY/NJ details with respect to taxes, etc., but most consider the NY 529 plan to be among the best.

2. Lots of threads on the topic here. Search them. Most people here are supportive and use them, at least to the state tax deduction, where applicable.

3. Yes, you can change the beneficiary, so you can have yourself as a beneficiary, your spouse, your kids/grandkids, cousins, etc.

4. Yes, lots.

[Rambo]

Vagabond MD wrote:

1. I don’t know specific NY/NJ details with respect to taxes, etc., but most consider the NY 529 plan to be among the best.

2. Lots of threads on the topic here. Search them. Most people here are supportive and use them, at least to the state tax deduction, where applicable.

3. Yes, you can change the beneficiary, so you can have yourself as a beneficiary, your spouse, your kids/grandkids, cousins, etc.

4. Yes, lots.

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Thanks

 

Are there any consequences i.e. tax consequences when changing beneficiaries?  For example, if the monies in the 529 are not used by the immediate offspring, and beneficiaries are then the grandchildren, does this trigger any IRS bylaws?

[VagabondMD]

Rambo wrote:

Vagabond MD wrote:

1. I don’t know specific NY/NJ details with respect to taxes, etc., but most consider the NY 529 plan to be among the best.

2. Lots of threads on the topic here. Search them. Most people here are supportive and use them, at least to the state tax deduction, where applicable.

3. Yes, you can change the beneficiary, so you can have yourself as a beneficiary, your spouse, your kids/grandkids, cousins, etc.

4. Yes, lots.

Click to expand…

Thanks ?

 

Are there any consequences i.e. tax consequences when changing beneficiaries?  For example, if the monies in the 529 are not used by the immediate offspring, and beneficiaries are then the grandchildren, does this trigger any IRS bylaws?

Click to expand...

No, no tax consequences to changing the beneficiary.

The opinions on how to best invest in and apply the 529 are as varied as the opinions on how much to save for college, state vs private college, etc.

Personally, I saved enough in 529s to pay for each of my two children to attend private college, 10 years ago (about $165k). Unfortunately, my eldest is attending private college in the fall. I will make up the difference by paying for his first year entirely out of cash flow.

I also have a sizable UTMA for each child (about $125k each) that can be used for college or grad school, if need be, or starting in life expenses. Most of the respondents here have not save and planned in this manner, to my knowledge.

[StarTrekDoc]

529 is fine. Just don't over save in them. Typically we here front load and them forget and move into fun purchases like a Tesla ?

Enough = what you think they will go... Public vs private.

@vagab your kids...they know about their utma or not? That college kid may be buying something nice in addition to private college

[VagabondMD]

@startrekdoc

Yes, he knows about UTMA and has little interest in it. Of all of my concerns in life, my son raiding the UTMA is among the least of my concerns, down there with the earth crashing into the sun and @PhysicianonFire repudiating his passion for beer.

[Rambo]

StarTrekDoc wrote:

529 is fine. Just don’t over save in them. Typically we here front load and them forget and move into fun purchases like a Tesla

Enough = what you think they will go… Public vs private.

@vagab your kids…they know about their utma or not? That college kid may be buying something nice in addition to private college

Click to expand...

If one front loads, and assuming a tax break, then one misses out on the tax break, correct?  There is no way to carry forward the deduction right?