On Dec 3, 4:15 am, dave.har...[at]gmail.com wrote:
- quote -

I ended up going with Illinois's Brightstarsavings plan. It offered
some Vandguard index funds with some of the lowest loads and fees I
could find.

On Wed, 3 Dec 2008 14:21:02 -0600, kastnna <kastnna[at]auburnalum.orgwrote:

- quote -

I believe that in the distant future there will again be profits, the
tax on which will be important. But for now I can't get excited about
the Roth's "tax-free distributions".

Now if they came up with a greater tax write off for losses...


-HW "Skip" Weldon
Columbia, SC

On Dec 3, 1:52*pm, BreadWithS...[at]fractious.net wrote:

- quote -

I think you answered your own question further down.

- quote -

Well I'll be...! Last time I checked, this deduction was tied to
another state revenue bill that didn't have a very optimistic future.
Apparently, the deduction made it through mid-2008 and is
retroactive.

I learn sumthin' new every day!

- quote -

Yes, this was my same thought in regards to the tax free withdrawals.
At some point, avoiding a small tax is not worth the devastation that
crappy investments and high expenses will do. Deducting the
contribution improves the AL plan, but whether that's enough to make
them a clear favorite or not will depend on the math.

Thanks again for the correction.

kastnna <kastnna[at]auburnalum.org> writes:

- quote -

Is there any reason one couldn't use, say, Utah's plan and
then transfer the balance to AL's plan the year before your
kid starts to take withdrawals for college?

Also, according to
<http://www.savingforcollege.com/529_...ils&plan_id=69
Beginning in 2008, contributions of up to $5000/yr are
deductible in computing Alabama taxable income.

(subject to recapture for non-qualified withdrawals)

Same page says that Alabama taxpayers must pay state
tax on earnings rolled into an Alabama 529 plan, so
it looks like they still capture taxes on the growth
which took place out of state in the event that one
uses, say, Utah until the year before. That kind of
stinks, and it may be worth just leaving the money
in Utah if you're going to pay Alabama state taxes
on it either way.

Even the deduction up front for contributions may be
worth giving up if the investment choices aren't great
(and they don't appear to be). The highest state income
tax rate is 5%, so if the expenses are, say, 0.5% lower
in another state's plan, the savings are offset in less
than 10 years (less if the balance grows fast).


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

The following are both a good start (you must be a member, but it's
free and well worth it IMO):

http://news.morningstar.com/articlen...aspx?id=234422

http://news.morningstar.com/articlen...aspx?id=187673

I live and work as a financial planner in Alabama and it's safe to say
that the Van Kampen plan offered by our state is pretty unattractive.
Alabama does not allow an income tax deduction for contributions to
ANY state plan (including its own). According to M*, both the
investment choices and expenses are lacking.

AL does allow for STATE tax free withdrawals for qualified education
expenses, but only for withdrawals from the AL plan. That may be the
only advantage the Alabama plan has. Because our income taxes are
already so low, it is possible that any state tax savings would be
dwarfed by the underperformance and over-expense of the investments.
Of course, that depends on a number of personal variables that we do
not currently know.

Alabama also has a pre-paid college tuition program (PACT). It is a
typical pre-paid arrangement in that you promise to pay $x and Alabama
promises to send your kid to school. Naturally, it's not that cut and
dry, but that's the gist.

Personally, I've always liked Virginia, Colorado, and Utah's plans.

I've been looking into starting a 529 plan for my daughter, but have
realized that the state-specific nature of the plans make it difficult
to compare, especially since good advice for a person in state A might
not apply to a person in state B.

I live in Alabama, and have perused Alabama's 529 plan. However, the
529's in other states look more appealing in some ways. My question
is, based on Alabama's 529 plan and tax code, would it be better to
invest in Alabama's 529 plan, or another state (such as Colorado or
Virginia)? I realize I'll have to do more studying to make a
decision, but any advice or pointers that could save time is always
welcome.

Thanks in advance!
Dave