ESA vs. 529 Plans?

Page 2 of Looking to open up a college fund/plan for the little guy and have started to research the pros and cons of the ESAs vs. 529 plans... Anyone have good ... 30 comments | 609 Views | Go to page 1 →

  1. #16
    woodsrider's Avatar
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    Quote Originally Posted by rjs4470 View Post
    It’s not really that hard. Set up automatic investments in an amount you can stomach and add a few $’s to it whenever you can. In reality, the key to affordable college is your child getting good grades and performing well on the ACT/SAT. I’ve got two in college now, and you of course know my youngest who will be heading to college next fall. I’m paying less than $2k a year for my oldest, and my middle kid is going to EKU for next to nothing, simply because they did very well in high school. My youngest is likely going to Bellarmine, and despite the $50k price tag, in reality, it’s going to cost less than $5k. The 529’s have paid for extras like food and other living expenses.
    This what I'm hoping for with my daughter as well. She is very smart and so far has maintained straight As. My son might be different story, of course he's still pretty young.
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  2. #17
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    Quote Originally Posted by rjs4470 View Post
    It’s not really that hard. Set up automatic investments in an amount you can stomach and add a few $’s to it whenever you can. In reality, the key to affordable college is your child getting good grades and performing well on the ACT/SAT. I’ve got two in college now, and you of course know my youngest who will be heading to college next fall. I’m paying less than $2k a year for my oldest, and my middle kid is going to EKU for next to nothing, simply because they did very well in high school. My youngest is likely going to Bellarmine, and despite the $50k price tag, in reality, it’s going to cost less than $5k. The 529’s have paid for extras like food and other living expenses.
    I meant more because we can open one yet, not having any kids yet and all.

  3. #18

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    Quote Originally Posted by plantmanky View Post
    I meant more because we can open one yet, not having any kids yet and all.
    You could always start setting money aside now and move it into one once you have kids. And waiting isn’t an awful idea...we didn’t put one together for my daughter until she was two...we were still able to set a decent chunk of money aside.

  4. #19
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    For those posters above with children in college on scholarship, will you be able to spend all the money you saved in 529's?

    What happens to the money if you don't need it for college expenses?

  5. #20
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    Quote Originally Posted by Voice of Reason View Post
    For those posters above with children in college on scholarship, will you be able to spend all the money you saved in 529's?

    What happens to the money if you don't need it for college expenses?
    Yes you can find a way to spend it. There are lots of ways to spin education costs for the child or for another family member. Save your receipts.

  6. #21
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    Quote Originally Posted by rjs4470 View Post
    You could always start setting money aside now and move it into one once you have kids. And waiting isn’t an awful idea...we didn’t put one together for my daughter until she was two...we were still able to set a decent chunk of money aside.
    I thought you could start one even if you didn't have kids. If not, you can always open one up in your name and then xfer to a family member later.

  7. #22
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    Quote Originally Posted by TAC View Post
    Yes you can find a way to spend it. There are lots of ways to spin education costs for the child or for another family member. Save your receipts.

    If you don't spend it, can you get money back. Can it go to the kids in their name so tax consequences are their's?

  8. #23
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    Quote Originally Posted by littleluck55 View Post
    If you don't spend it, can you get money back. Can it go to the kids in their name so tax consequences are their's?
    Not to my knowledge. But other family members could use it. Continued education, real estate classes, computers, masters, etc. I started late with mine hoping the bridge the financial gap when both kids were in school at the same time. Youngest got a full ride but we still have been able to find things to spend it on and since the first 2 years it was not touched for the oldests education we have plenty of receipts. Iím still putting in until the youngest graduates.

  9. #24
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    Quote Originally Posted by TAC View Post
    Not to my knowledge. But other family members could use it. Continued education, real estate classes, computers, masters, etc. I started late with mine hoping the bridge the financial gap when both kids were in school at the same time. Youngest got a full ride but we still have been able to find things to spend it on and since the first 2 years it was not touched for the oldests education we have plenty of receipts. I’m still putting in until the youngest graduates.
    FYI ... If your child is on scholarship and you want to get the money out of the 529, you can avoid the 10% penalty on pulling money out. You have to pay tax on the earnings you pull out but no 10% tax penalty.

  10. #25
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    Quote Originally Posted by Voice of Reason View Post
    FYI ... If your child is on scholarship and you want to get the money out of the 529, you can avoid the 10% penalty on pulling money out. You have to pay tax on the earnings you pull out but no 10% tax penalty.
    Thanks, the account will be closed out before he graduates. He upgraded his living quarters which is out of pocket. My advisor did tell me the account can stay open in case someone in the family uses it for a masters or other educational type purchases.

  11. #26

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    Quote Originally Posted by TAC View Post
    Thanks, the account will be closed out before he graduates. He upgraded his living quarters which is out of pocket. My advisor did tell me the account can stay open in case someone in the family uses it for a masters or other educational type purchases.
    There is a lot of flexibility in how the funds can be used. Almost any living expense related to college can be paid for by using those funds. Food is the big one that we use the funds for. It can't be used for restaurant food, but we use it to pay for weekly trips to Kroger. The one thing you do have to be careful of is not to exceed the estimated cost of attendance when using the funds.

  12. #27
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    I'm glad I saw this post, I need to get on this asap.

  13. #28
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    Quote Originally Posted by TAC View Post
    Not to my knowledge. But other family members could use it. Continued education, real estate classes, computers, masters, etc. I started late with mine hoping the bridge the financial gap when both kids were in school at the same time. Youngest got a full ride but we still have been able to find things to spend it on and since the first 2 years it was not touched for the oldests education we have plenty of receipts. I’m still putting in until the youngest graduates.
    I'm in this boat now. My oldest just graduated HS, but wants to go into the military next year. As of now, she has decided not to go to college. My youngest is a junior and has every intention to go to college. She carries an A average and we are waiting on score from ACT so hoping she has some type of academic scholarship as well as she has some small scholarships. I am not sure what we are going to do with the oldest 529 yet.

    Maybe I'll go back to school with my youngest and join a fraternity.

  14. #29

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    Quote Originally Posted by littleluck55 View Post
    I'm in this boat now. My oldest just graduated HS, but wants to go into the military next year. As of now, she has decided not to go to college. My youngest is a junior and has every intention to go to college. She carries an A average and we are waiting on score from ACT so hoping she has some type of academic scholarship as well as she has some small scholarships. I am not sure what we are going to do with the oldest 529 yet.

    Maybe I'll go back to school with my youngest and join a fraternity.
    After doing a college visit to Bellarmine with my son a couple weeks ago, I strongly considered going back. I've even got a year of eligibility left...not sure they need a 47 year old DH on the baseball team though.

  15. #30
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    Quote Originally Posted by littleluck55 View Post
    I'm in this boat now. My oldest just graduated HS, but wants to go into the military next year. As of now, she has decided not to go to college. My youngest is a junior and has every intention to go to college. She carries an A average and we are waiting on score from ACT so hoping she has some type of academic scholarship as well as she has some small scholarships. I am not sure what we are going to do with the oldest 529 yet.

    Maybe I'll go back to school with my youngest and join a fraternity.
    You can transfer from the oldest 529 to the youngest. I only had one name on mine and changed when the oldest graduated.

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