"Andy" <ineverevercheckthismailbox[at]yahoo.com> wrote in message
news:1136340478.923000.159600[at]o13g2000cwo.googlegroups.com...
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I can only speak for FLORIDA, and that did not happen here.
As a matter of fact, the program has been improved, in that originaly
your child HAD to go to a Florida school. Currently, the funds can be
used for ANY college, EXCEPT that it will only pay what the TUTION
for a Florida College is.
Cal

cal lester wrote:
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Didn't some states renege on their guaranteed tuition plans a few years
ago and retroactively convert them to a plan where you just get paid
based on how much you contributed over the years? I remember reading
an article about that, but I wasn't paying too close attention since it
didn't affect me.

Andy

herlihyboy wrote:
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That's true, though it's more of an issue with the broker-sold 529
plans. When you factor in commissions & costs, it might outweigh the
potential tax benefits. Especially when you live in a state with a
state-tax benefit, but you're sold an out-of-state plan, which
apparently is common. E.g. in today's Wall St. Journal, "Disclosure
Proposals for 529s Risk a Broker Backlash":

"In 2003, the National Association of Securities Dealers began reviewing
the sales practices that dealers use to market plans. It discovered that
more than 90% of the sales by some firms were to out-of-state residents,
even though about half of the states give a tax deduction to their
citizens for contributions.

The association ordered Ameriprise Financial Services Inc. to pay a
$500,000 fine last year for failing to supervise sales of 529 plans
adequately. Investigations of other firms are expected to be resolved in
2006."

Savingforcollege.com has some good tools that make it easy to compare
costs across different states' plans.

-Tad

Tad Borek wrote:
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Check out the fee structure of a particular state's 529 plan before you
pick one. I believe they all charge an administrative type fee, but
from what I understand it can be pretty high for some states.

<jasontyip[at]yahoo.com> wrote in message
news:1136265011.468235.193590[at]o13g2000cwo.googlegroups.com...
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Have you considered your States Guaranteed College Plan??
Here in Florida, one can contribute to such a plan that will
ABSOLUTELY GUARANTEE FULL TUITION in a
State College (or equivalent).
Cal

jasontyip[at]yahoo.com wrote:
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Two that are similar to IRAs, when you use the money for education, are:

Coverdell Education Savings Accounts ("education IRAs") - you put in
after-tax money, it grows tax-deferred, and withdrawals are tax-free.
Like an IRA you can open one at many (most) brokerage firms and mutual
fund companies so there's a wide range of investment alternatives.
Downside is that annual contributions are limited to just $2,000 which
doesn't go all that far towards covering college costs.

529 plans - sponsored by each state - you put in after-tax money, it
grows tax-deferred. Investment alternatives vary by state...much like a
401k plan there's a list of mutual funds to choose from. But you can use
any state's plan so there are a bunch to consider (if you're a Vanguard
fan some states that use their funds are Nevada, Utah, NY). Tax on
withdrawal is unclear at this point...until 2010 it's tax-free, but the
law creating these plans didn't extend the tax-free nature beyond that.
If Congress renews it, it's tax-free...if not, it's just tax-deferred
(taxed at child's rate at withdrawal, which could be close to tax-free
anyway). Some states have a state tax deduction for contributions to
529s if you use the in-state plan, but not CA, currently. Very high
contribution limits - as high as $200k+.

A good site to research this stuff is www.savingforcollege.com

-Tad

jasontyip[at]yahoo.com wrote:
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Series I savings bonds. The I and EE bonds I bought for DD's education
have more than doubled in value. The Fidelity Blue Chip Growth fund I
was contributing to for 14 years has only appreciated about 20% (I
picked a loser of a fund.) If you purchase the bonds in your name
rather than Baby's, you don't have to pay federal income taxes on the
interest when the bonds are cashed in the same year she has college
expenses (I don't know all the restrictions.)

Savings bonds are safe and tax efficient. If you want higher returns
and a little higher risk, do a search on "Coverdell savings account",
and invest in a good mutual fund (maybe an index fund) thru a Coverdell
account.

Don't put all the money in one place; mix it up a little.

Also, remember that saving for your retirement comes first. Baby can
get a student loan to help pay for her education, but you can't borrow
for retirement. If you are well-off when the time comes, you can pay
off that student loan for a graduation gift. :-)

Hope this helps,
Bob

I'm hoping someone can offer their opinion on what I should be doing to
invest for my newborn's future college education. Some background, my
wife and I (both 30) have been making contributions to our Vanguard
Roth IRA for the past 6 years. We live in California. Are there any
investment similar to an IRA, that could possibly offer tax benefits?
Pros/Cons? Any advice would be greatly appreciated. Thanks.

Jason