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529 college accounts?

Do you know anything about them? I called our bank once to get information, but it was a bit overwhelming at the time that i told them I wasnt ready to open that account at that time. So anyone have any helpful/useful information to share about them?! THANKS!

 
anikahaynes1

Asked by anikahaynes1 at 3:15 PM on Oct. 17, 2010 in Money & Work

Level 18 (5,798 Credits)
This question is closed.
Answers (3)
  • If your income allows it I personally would do an ESA (educational savings account) where you actually get to choose where to put your money instead of just having a few choices. Does that make sense? They can also be used for elementary and higher education expenses.

    Down side is you can only contribute $2000 per year per child. 529's don't have a limit.

    I personally would look at a mutual fund to invest the money. So a bank would not be the place to go. A financial adviser could help you decide how and where to invest the money. I would NOT set it up in something that gradually gets more conservative over time. I doesn't pay attention to the stock market, so it might cash out when he market is down just because your child is six years away from college.
    Erica_Smerica

    Answer by Erica_Smerica at 1:45 AM on Oct. 18, 2010

  • It depends on what you want to know. Basically it's an account that you can set up just like any other investment account. You put money into it and the money can only be withdrawn for post-secondary educational expenses (unless you incur a penalty). The contributions are tax deductible. The beneficiary can also be transferred. For example, if you set it up for one child,. you can later transfer it to a different child or a parent who may be going to college.

    You decide how you want the money in it invested. You can invest it conservatively, moderately aggressive, or aggressive. Your earnings can go up or down depending on the market and what you have your money invested in.

    I recommend going to a financial advisor to set one up. They're very helfpul.
    SherriPie

    Answer by SherriPie at 7:33 PM on Oct. 17, 2010

  • Thank you Sherri...i would go to our bank and talk to them, but we deal with a military only bank, and they have no bankds like a traditional bank of america, citi bank, etc etc...we dont have a bank where we can go in and do things like that, they strictly deal on line and telecommunications.

    Your reply was very informitive thank you!
    anikahaynes1

    Comment by anikahaynes1 (original poster) at 7:35 PM on Oct. 17, 2010

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