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529 plans

nugget0204nugget0204
in Maryland Babies

Good Morning!!!

Did you open your 529 plan online or are they available through a bank.  I was just wondering did someone went over the options with you?  Or did you just read through the online literature?

 

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Re: 529 plans

  • had720had720
    My sister has them for her sons, so I am using her financial advisor. He explained everything to me, I don't understand much of the lingo so he was able to explain it thoroughly. If you understand what you want, you can definately read online, but talking to someone is helpful too.
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  • SnoopyLuvSnoopyLuv member

    T. Rowe price administers the Maryland 529 plan, which provides you state tax benefits. Any other plan doesn't give you the state tax benefit.

     collegesavingsmd.org or you can go to one of their offices.

    I actually used to work for the plan so PM me if you have questions.

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  • Megcheer2Megcheer2 member
    I called and got a packet of info mailed to me and I read through that, then I just decided on my own which option to do.
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  • anonsouthernbellanonsouthernbell member
    Another option is to use a Roth IRA.  One of the financial planners at USAA suggested that instead of a 529 plan b/c she said best case scenario her kid would have a free ride to college and then she would have more money for her retirement.
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  • SnoopyLuvSnoopyLuv member

    imageanonsouthernbell:
    Another option is to use a Roth IRA.  One of the financial planners at USAA suggested that instead of a 529 plan b/c she said best case scenario her kid would have a free ride to college and then she would have more money for her retirement.

    That is terrible financial planning advice.

    1) A child cannot have a Roth IRA in their name unless they have income. So, that means you're using the parents Roth, that's taking away from putting income away for their own retirement. Your own retirement should be your #1 priority. You cannot borrow for retirement but you can borrow for school.

    2) The roth still has a tax on any earnings that are withdrawn, the 529 has tax free withdrawals when used for school. A 529 can also get you state tax benefits, a Roth cannot.

    3) There are contribution limits (5-6K a year), the 529 has a $320k contribution limit. Also, many people in high income brackets cannot have Roth IRAs.

    I am appalled at that financial advice.

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  • anonsouthernbellanonsouthernbell member
    Well she said that you could do a Roth or Trad. IRA and yes it would be in the parent's name.  The point she was making was that if he needed the money we could take it out, but if not then it would be extra income for retirement, whereas what if our son didn't end up needing the 529 income.
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