Comments on: 529 Plan Basics: An Easy to Understand Guide to College Planning

By: Monica @MonicaOnMoney

Monica @MonicaOnMoney — Tue, 23 Jul 2013 16:53:52 +0000

Thanks for explaining the 529 in detail! This is very informative for readers.

By: Michael Lux

Michael Lux — Thu, 18 Jul 2013 23:15:27 +0000

In reply to Andrew@LivingRichCheaply. Congrats on the birth of your son! And great find on the 529... that $50 head start sounds awesome!

By: Andrew@LivingRichCheaply

Andrew@LivingRichCheaply — Thu, 18 Jul 2013 20:03:31 +0000

My son was born about a week ago, but I started a 529 plan a few months ago. There was a LivingSocial deal which gave me $75 for $25. So there is $75 in the plan. I will start contributing a little bit each month. My state also has a tax deduction for the plan.

By: Michael Lux

Michael Lux — Thu, 18 Jul 2013 16:11:51 +0000

In reply to Grayson @ Debt Roundup. Wow! You didn't waste any time setting that up. It sounds like your state has a great program for you and your son.

By: Grayson @ Debt Roundup

Grayson @ Debt Roundup — Thu, 18 Jul 2013 14:41:27 +0000

I started a 529 three days after my son was born. We get tax advantages in our state, but if I had to take the money out, I am only taxed on the earnings since I am contributing after tax money. I still have the penalty, but it works the same was as a Roth IRA with regards to taxing the earnings, not the contributions.

By: Michael Lux

Michael Lux — Thu, 18 Jul 2013 13:47:19 +0000

In reply to Matt Becker. It is a great thing to do for your child. As one who recently graduated, I know without a doubt that every little bit helps. Your scholarship exception sounds very interesting. I will check to see when and how it applies and update the post accordingly. Thanks for the heads up!

By: Matt Becker

Matt Becker — Thu, 18 Jul 2013 13:10:48 +0000

Nice overview. We started a 529 for our son and contribute a small amount each month to it. We also put gift money he gets into it. Our current contribution level certainly won’t fund 4 years of college, but it’s nice to have something.

One additional point, I believe you are allowed to withdraw money penalty-free if your child gets scholarships. I’m honestly not clear on all of the rules surrounding that, but it can eliminate some concerns about the money being wasted.

By: Michael Lux

Michael Lux — Thu, 18 Jul 2013 12:22:53 +0000

In reply to Holly@ClubThrifty. That is awesome! Starting the 529 early is definitely the way to go.

By: Holly@ClubThrifty

Holly@ClubThrifty — Thu, 18 Jul 2013 11:23:01 +0000

I started a 529 for each of my kids when they were babies and I am sooooooooo glad that I did. They are 2 and 4 now and they have started to really accumulate some cash in those accounts. I contribute to each of them monthly and I also put all of their Christmas/birthday money in there.