G*O
发帖数: 706 | | j********1
发帖数: 628 | | o*******p
发帖数: 722 | 3 it is very inflexible. high expense ratio, people in these plans have lost
tons of money.
【在 G*O 的大作中提到】
: 谁能具体介绍一下。
: 多谢！！
| h*******y
发帖数: 864 | 4 Yes, I read up over the weekend and decided that I will never join 529 plan.
【在 o*******p 的大作中提到】
: it is very inflexible. high expense ratio, people in these plans have lost
: tons of money.
| f****t
发帖数: 1063 | 5 say say reason, please!
plan.
【在 h*******y 的大作中提到】
: Yes, I read up over the weekend and decided that I will never join 529 plan.
| c****o
发帖数: 32446 | | K****D
发帖数: 30533 | 7 it's not like 401(k), so doesn't qualify for LZ's question.
【在 c****o 的大作中提到】
: 还有一个叫ESA，比529强点
| c****o
发帖数: 32446 | 8 ESA vs 529 is like IRA vs 401K
You are right in terms of this.
【在 K****D 的大作中提到】
: it's not like 401(k), so doesn't qualify for LZ's question.
| h*******y
发帖数: 864 | 9 Because the whole concept is flawed, college is NOT like retirement. You can
postpone the retirement when the market is in bear market (like many
boomers plan to do right now). But can you tell your kids, "honey, you can't
go to college this year because we have to wait for the next bull market?"
So unless you have five kids, market volatility will kill your return
especially since college tuition will come much sooner than the retirement (
therefore, less compounding on the earning). It doesn't
【在 f****t 的大作中提到】
: say say reason, please!
:
: plan.
| o*******p
发帖数: 722 | 10 yes, but only $2000 a year, right?
【在 c****o 的大作中提到】
: 还有一个叫ESA，比529强点
| | | K****D
发帖数: 30533 | 11 Well, it doesn't offer much tax benefit, but it's still tax benefit.
Fly meat is still meat ah.
As long as there is money market fund available in 529 plan, it's
possible to establish a conservative portfolio that targets at
10-15 years later, which becomes more conservative approaching
the target date.
But I heard the choices in 529 plans are even fewer than 401k, so
it might not be possible to create a home-made target date fund.
can
't
"
(
tax
【在 h*******y 的大作中提到】
: Because the whole concept is flawed, college is NOT like retirement. You can
: postpone the retirement when the market is in bear market (like many
: boomers plan to do right now). But can you tell your kids, "honey, you can't
: go to college this year because we have to wait for the next bull market?"
: So unless you have five kids, market volatility will kill your return
: especially since college tuition will come much sooner than the retirement (
: therefore, less compounding on the earning). It doesn't
| K****D
发帖数: 30533 | 12 //nod.
【在 o*******p 的大作中提到】
: yes, but only $2000 a year, right?
| h*******y
发帖数: 864 | 13 These target funds just give one a false sense of stability and complete
ignore market conditions. Say, if an unfortunate soul was planning to setup
a college fund for his kid at the end of the last century. The target fund
would require him to be all in at the the market peak, and switch now to the
ridiculous treasury yield today when the original investment is halved.
As Warren Buffett puts it, to be successful in investment, you need some wet
snow and a very long hills. The college-fund hill
【在 K****D 的大作中提到】
: Well, it doesn't offer much tax benefit, but it's still tax benefit.
: Fly meat is still meat ah.
: As long as there is money market fund available in 529 plan, it's
: possible to establish a conservative portfolio that targets at
: 10-15 years later, which becomes more conservative approaching
: the target date.
: But I heard the choices in 529 plans are even fewer than 401k, so
: it might not be possible to create a home-made target date fund.
:
: can
| K****D
发帖数: 30533 | 14 If you use Vanguard's formula, it will probably ask you to start with
50% equity 50% bond on day 1, if your target is 10 years away.
I had 30 years to retirement and it even asked me to go with 20% bond.
But again, if one starts in 2000, he is just unlucky. There is no
solution. His kids have to get student loans.
Your way (buying a house and earn the rent) to fund the college has
very high risk. For most people, doing that requires them to squeeze
out 20% downpay, which could have been used as
【在 h*******y 的大作中提到】
: These target funds just give one a false sense of stability and complete
: ignore market conditions. Say, if an unfortunate soul was planning to setup
: a college fund for his kid at the end of the last century. The target fund
: would require him to be all in at the the market peak, and switch now to the
: ridiculous treasury yield today when the original investment is halved.
: As Warren Buffett puts it, to be successful in investment, you need some wet
: snow and a very long hills. The college-fund hill
| s*******d
发帖数: 126 | 15 "it is very inflexible"
true to some extent, such as limited number of ways to shoot yourself in the
foot.
"high epense ratio"
not true
"... lost tons of money."
this has everything to do with investment and nothing with 529.
【在 o*******p 的大作中提到】
: it is very inflexible. high expense ratio, people in these plans have lost
: tons of money.
| s*******d
发帖数: 126 | 16 college saving is an investment with time objective, there is wrong with
that. Nobody says that it is retirement, and one shouldn't use the same
strategy. In all alternatives that one has, such as carrying investement in
taxable accounts, 529 offers more advantages, such as tax-free growth for 20
+ years. How else can you beat this?
can
't
"
(
tax
【在 h*******y 的大作中提到】
: Because the whole concept is flawed, college is NOT like retirement. You can
: postpone the retirement when the market is in bear market (like many
: boomers plan to do right now). But can you tell your kids, "honey, you can't
: go to college this year because we have to wait for the next bull market?"
: So unless you have five kids, market volatility will kill your return
: especially since college tuition will come much sooner than the retirement (
: therefore, less compounding on the earning). It doesn't
| K****D
发帖数: 30533 | 17 How come it's 20+ years? Start preparing before the child is born? @_@
I only see 10-15 years on average.
I personally prefer ESA before 529. Most people who consider college
savings should max out ESA first before 529.
in
20
【在 s*******d 的大作中提到】
: college saving is an investment with time objective, there is wrong with
: that. Nobody says that it is retirement, and one shouldn't use the same
: strategy. In all alternatives that one has, such as carrying investement in
: taxable accounts, 529 offers more advantages, such as tax-free growth for 20
: + years. How else can you beat this?
:
: can
: 't
: "
: (
| s*******d
发帖数: 126 | 18 it is not that what you suggested, such as buying a house and renting it out
and using that to fund a kid's college education, is an invalid investment
strategy. That said, it is an entirely different thing to claim that what
you have is "better" than the 529 plans, for most parents in most situations
. You need to quantitatively demonstrate that your way of ad hoc approach to
college saving is better (in all sense of the word) than 529 plans, after
taking into account of all related risks and c
【在 h*******y 的大作中提到】
: These target funds just give one a false sense of stability and complete
: ignore market conditions. Say, if an unfortunate soul was planning to setup
: a college fund for his kid at the end of the last century. The target fund
: would require him to be all in at the the market peak, and switch now to the
: ridiculous treasury yield today when the original investment is halved.
: As Warren Buffett puts it, to be successful in investment, you need some wet
: snow and a very long hills. The college-fund hill
| s*******d
发帖数: 126 | 19 there is no time limit on when you have to use the money, and yes, you
actually can start a 529 plan before a child is born. By 20 years, I meant
that, if you start at year 0, you probably don't have to use up all the
money until the last semester of a kid's college (in most cases), that's 22
years. You can certainly use the money for post-college, such as grad/med/
law school education.
The money can stay in 529 for as long as you want, and it does not have to
be in a child's name. You can star
【在 K****D 的大作中提到】
: How come it's 20+ years? Start preparing before the child is born? @_@
: I only see 10-15 years on average.
: I personally prefer ESA before 529. Most people who consider college
: savings should max out ESA first before 529.
:
: in
: 20
| h*******y
发帖数: 864 | 20
in
20
A taxable account allows you to use the fund for ANY purpose at ANY time.
Once you put money into 529, you can only use it for educational purpose and
for most people, use it during a pre-determined timeframe. Otherwise, the
earning will be taxed and and an additional 10% federal tax penalty will be
accessed.
What part of the term "federal tax penalty" that you don't understand, that
you think it only offers advantages?
When the child goes to college, one originally has multiple options o
【在 s*******d 的大作中提到】
: college saving is an investment with time objective, there is wrong with
: that. Nobody says that it is retirement, and one shouldn't use the same
: strategy. In all alternatives that one has, such as carrying investement in
: taxable accounts, 529 offers more advantages, such as tax-free growth for 20
: + years. How else can you beat this?
:
: can
: 't
: "
: (
| | | K****D
发帖数: 30533 | 21 What will happen if I die with some unused portion in 529? @_@
22
anticipation
children'
【在 s*******d 的大作中提到】
: there is no time limit on when you have to use the money, and yes, you
: actually can start a 529 plan before a child is born. By 20 years, I meant
: that, if you start at year 0, you probably don't have to use up all the
: money until the last semester of a kid's college (in most cases), that's 22
: years. You can certainly use the money for post-college, such as grad/med/
: law school education.
: The money can stay in 529 for as long as you want, and it does not have to
: be in a child's name. You can star
| K****D
发帖数: 30533 | 22 It's similar to FSA. If you use conservative planning and make sure you
will use up every penny of it the correct way, then it does have tax
advantage.
I don't like the idea of overfunding 529, and then later force my children
to go to Harvard. I would rather underfund, and fill up the mismatch
from other sources if they (indeed!) go to Harvard.
and
be
that
【在 h*******y 的大作中提到】
:
: in
: 20
: A taxable account allows you to use the fund for ANY purpose at ANY time.
: Once you put money into 529, you can only use it for educational purpose and
: for most people, use it during a pre-determined timeframe. Otherwise, the
: earning will be taxed and and an additional 10% federal tax penalty will be
: accessed.
: What part of the term "federal tax penalty" that you don't understand, that
: you think it only offers advantages?
| s*******d
发帖数: 126 | 23 529 is for education, and the tax-free growth is for education. I am not
putting money in 529 to buy a house, and that will be stupid. what you have
critized has more to do with inappropriate investement allocation, not with
529.
I never made the claim that 529 should be the *only* source of investement
option when it comes to college education.
if the kid receives a scholarship, you can take an equivalent amount of
money out without paying the 10% penalty (you'd still pay tax on the gains),
tha
【在 h*******y 的大作中提到】
:
: in
: 20
: A taxable account allows you to use the fund for ANY purpose at ANY time.
: Once you put money into 529, you can only use it for educational purpose and
: for most people, use it during a pre-determined timeframe. Otherwise, the
: earning will be taxed and and an additional 10% federal tax penalty will be
: accessed.
: What part of the term "federal tax penalty" that you don't understand, that
: you think it only offers advantages?
| h*******y
发帖数: 864 | 24 I'm definitely not saying that my plan is "better" than the 529 plan,
especially for most parents in most situations. My point was "investment" (
mostly characterised as buy-and-hold) only works in you have sufficient time
horizon. College education's time horizon is too short therefore it is a
daunting task to come up with an entry/exist strategy that would be able to
fully utilize its tax benefit.
Say, 10 years into 529 plan, the market is in its bull market cycle. Should
you convert it to con
【在 s*******d 的大作中提到】
: it is not that what you suggested, such as buying a house and renting it out
: and using that to fund a kid's college education, is an invalid investment
: strategy. That said, it is an entirely different thing to claim that what
: you have is "better" than the 529 plans, for most parents in most situations
: . You need to quantitatively demonstrate that your way of ad hoc approach to
: college saving is better (in all sense of the word) than 529 plans, after
: taking into account of all related risks and c
| K****D
发帖数: 30533 | 25 How conservative one should be in a 529 plan depends on the timeframe
and one's ability to handle volatility, not on bear or bull market.
If stocks are the only funding source for college, than one should
invest in 529 plan the exactly same way as he would in normal investment
account. If he ends up with a gain after 10-15 years, he will enjoy
tax advantage. If with a loss, he will suffer tax disadvantage, comparing
to funding college outside of 529.
time
to
Should
the
【在 h*******y 的大作中提到】
: I'm definitely not saying that my plan is "better" than the 529 plan,
: especially for most parents in most situations. My point was "investment" (
: mostly characterised as buy-and-hold) only works in you have sufficient time
: horizon. College education's time horizon is too short therefore it is a
: daunting task to come up with an entry/exist strategy that would be able to
: fully utilize its tax benefit.
: Say, 10 years into 529 plan, the market is in its bull market cycle. Should
: you convert it to con
| K****D
发帖数: 30533 | 26 Is it possible to control the asset allocation in a 529 plan?
I never tried it, but I heard it usually doesn't have very good
choices. That's my major concern.
have
with
),
【在 s*******d 的大作中提到】
: 529 is for education, and the tax-free growth is for education. I am not
: putting money in 529 to buy a house, and that will be stupid. what you have
: critized has more to do with inappropriate investement allocation, not with
: 529.
: I never made the claim that 529 should be the *only* source of investement
: option when it comes to college education.
: if the kid receives a scholarship, you can take an equivalent amount of
: money out without paying the 10% penalty (you'd still pay tax on the gains),
: tha
| s*******d
发帖数: 126 | 27 You seem to argue that, having the money in a taxable account gives one some
flexiability in when and how to use the money (for example, prolong the
hold-period if one feels uncomfortable selling) to therefore maximize the
total return. Because there is a time limitation on 529, such flexibility is
limited and the trade-off (potential tax-free growth) is not worth it.
I don't want to get in the argument whether one could potentially get higher
return (with reduced or equal risk) had the money re
【在 h*******y 的大作中提到】
: I'm definitely not saying that my plan is "better" than the 529 plan,
: especially for most parents in most situations. My point was "investment" (
: mostly characterised as buy-and-hold) only works in you have sufficient time
: horizon. College education's time horizon is too short therefore it is a
: daunting task to come up with an entry/exist strategy that would be able to
: fully utilize its tax benefit.
: Say, 10 years into 529 plan, the market is in its bull market cycle. Should
: you convert it to con
| s*******d
发帖数: 126 | 28 you'd hope that whoever you put in your will will make your children the
beneficaries of the plan! :)
【在 K****D 的大作中提到】
: What will happen if I die with some unused portion in 529? @_@
:
: 22
: anticipation
: children'
| K****D
发帖数: 30533 | 29 This problem gets automatically solved if the beneficiaries are my
children, haha.
Hmm, will they be able to use the money for other purposes (than
education) then? @_@
【在 s*******d 的大作中提到】
: you'd hope that whoever you put in your will will make your children the
: beneficaries of the plan! :)
| s*******d
发帖数: 126 | 30 I am a big index/Vanguard person, so I have only looked at state plans that
use Vanguard (also my home state that offers a state tax deductable). In
Utah and NV, you can have some choices when it comes to different assets,
not many but sufficient for me. But the cost is low, especially in Utah.
【在 K****D 的大作中提到】
: Is it possible to control the asset allocation in a 529 plan?
: I never tried it, but I heard it usually doesn't have very good
: choices. That's my major concern.
:
: have
: with
: ),
| | | K****D
发帖数: 30533 | 31 That's not too bad.
I don't have state tax, and currently I rank 529 plan after
(maxing out) 401(k) and ESA.
I might consider raising ESA and 529 above (maxing out) 401(k).
I am just not a fan of 401(k).
But anyway, I think the time frame of college fund investing
for me is only about 10 years. Too poor to consider that now, //sigh...
that
【在 s*******d 的大作中提到】
: I am a big index/Vanguard person, so I have only looked at state plans that
: use Vanguard (also my home state that offers a state tax deductable). In
: Utah and NV, you can have some choices when it comes to different assets,
: not many but sufficient for me. But the cost is low, especially in Utah.
| s*******d
发帖数: 126 | 32 I think that the children could be beneficiaries but they are not the owners
of the account. When you are alive, you are the owner, and you can change
the beneficiaries to anyone you please, including a different child, or your
wife, or yourself (imagine that you just might want to go to culinary
school in 20 years!). If you give your wealth to your spouse or your
brothers/sisters in case you die, they are the legal owners of the 529 plan
and they can do what they want with it, including withdra
【在 K****D 的大作中提到】
: This problem gets automatically solved if the beneficiaries are my
: children, haha.
: Hmm, will they be able to use the money for other purposes (than
: education) then? @_@
|
|
