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529 question
Old 07-09-2016, 09:50 PM   #1
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529 question

Are there any options available to a young married couple who want to start a college savings plan for thier child if the child does not yet exist?

In other words, the couple have no children yet, but they have enough money and want to start a college savings fund for a child they plan to have in the future. What are their options?
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Old 07-09-2016, 11:45 PM   #2
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Sure, just open a 529 in your name. You can transfer it to your kid later.
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Old 07-10-2016, 08:30 AM   #3
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529 accounts are always in your name. You need to specify a beneficiary, but yes, you can name your self as the beneficiary, then change it any time you want to anyone in your family (where "family" is defined pretty liberally).
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Old 07-10-2016, 01:02 PM   #4
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So we're in the same boat, and are leaning toward an IL 529 to reduce my state income tax hit. That said, DD is due in September, but I think we're holding off funding until she's born on the off chance - God forbid - something happens.

If you've not yet conceived, I would not open/fund a 529 just yet because of the penalties associated with using the money for other than education expenses. I'd feel better about doing so in the third trimester, but as I said, we'll probably wait until she's born. You can always set the money aside in a short-term investment (CD, MM, etc.) until you're ready to actually plunk it down in the 529, and it doesn't matter when in the year you do that as far as the state tax benefits (if your state has any!) apply.

Not a fun subject to think about, but something to consider, IMO, and something we are considering ourselves.
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Old 07-10-2016, 06:06 PM   #5
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Quote:
Originally Posted by nash031 View Post
So we're in the same boat, and are leaning toward an IL 529 to reduce my state income tax hit. That said, DD is due in September, but I think we're holding off funding until she's born on the off chance - God forbid - something happens.

If you've not yet conceived, I would not open/fund a 529 just yet because of the penalties associated with using the money for other than education expenses. I'd feel better about doing so in the third trimester, but as I said, we'll probably wait until she's born. You can always set the money aside in a short-term investment (CD, MM, etc.) until you're ready to actually plunk it down in the 529, and it doesn't matter when in the year you do that as far as the state tax benefits (if your state has any!) apply.

Not a fun subject to think about, but something to consider, IMO, and something we are considering ourselves.
The world is a dangerous place at all times (between conception and birth, and between birth and college). You're right, tough thoughts to consider.

But you can always substitute a "family member" (niece, nephew, aunt, uncle, parents, grandparents, first cousins, the list goes on). If that doesn't work paying 10% penalty on the gains isn't all that horrific, but of course to be avoided.
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