should I open 2nd 529 for 2nd kid????


J

jayelwin

Hello all,

I was hoping someone may have some advice for me. I have a 529 plan
that I opened to save for my eldest child's college education. Now it
is time to start saving for my next child (and likely a third). Should
I open a second (and third) account for each successive child, or is
there enough flexibility in these accounts that I should just fund the
one and use it for all three. It seems that would minimize any
per-account fees.

Thanks

-Josh
 
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T

Tad Borek

I was hoping someone may have some advice for me. I have a 529 plan
that I opened to save for my eldest child's college education. Now it
is time to start saving for my next child (and likely a third). Should
I open a second (and third) account for each successive child, or is
there enough flexibility in these accounts that I should just fund the
one and use it for all three. It seems that would minimize any
per-account fees.

Per-account fees? You might look into 529 plans that don't have them, if
you'll be building these accounts gradually. Once the balances reach the
minimums for no fees at the plan you like, tranfer the money there. Try
www.savingforcollege.com to see no-fee plans and rules on transfers.

You could keep the money separate for a little while but each account
has just one beneficiary. Better to start off the way it'll need to look
long-term, which is one account per child. Especially if you use "age
based" investments in the 529 - it would be based on your eldest child's
age so would be too conservative for younger children.

-Tad
 
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J

Josh

Thanks for replying. I actually went with a fairly low fee 529, I chose
College Savings Iowa since they invest in my favorite mutual fund
company, Vanguard. The fees are pretty low, mostly based on percentage
(I believe around 0.60%) but there are some small annual fees for
accounts below x dollars. Also one account is just easier to manage.

I didn't realize that each account can only have one benificiary. I was
under the impression that qualified withdrawals could be for siblings
as well. You are right about the age based tracks, but I chose the
aggressive growth track which converts away from equities only at the
very end and my two children are only 23 months apart.

I guess opening a second account wouldn't be a huge challenge, I just
wanted to try to keep things simple.

-Josh
 

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