Re-visiting our College Savings Plans
Yesterday I spent some time reviewing my kids' 529 plans. We use our state's 529 plan because we can write off contributions on our state taxes. That hasn't been a huge benefit to date, however, because we have invested so little in them - mostly Christmas and Birthday money given to them by grandparents and Godparents.
Their March 31 statements came in the mail, however, and I noticed that the balances were starting to be enough to pay attention to. Between our small contributions and the stock market rebounding some the actual number was a surprise to me. But I still felt the return was a little piddly so I called to have their portfolios changed from "moderate" to "aggressive."
In doing so the customer service rep and I also noted that the year of their portfolio was actually the year before they were to graduate from high school. Our plan has portfolios in three year increments...2006, 2009, 2012, etc. I chose years closest to the dates my kids would be graduating but the closest years happened to be before they graduated, making their portfolios that much more conservative. That was something I hadn't thought of at the time. So with those two changes we should see slightly better returns.
Finally I dug out several years worth of savings bonds from the earlier mentioned grandparents and Godparents and took them to the bank to be cashed in. I then mailed checks in the proceed amounts to their 529 plans.
Because we are currently working on Step 2 of Dave Ramsey's Baby Steps, the college savings amounts aren't big. But I have hopes that they someday will be. Plus this kind of financial housekeeping makes me feel more on top of things.
One footnote: A site I have found really useful for info on 529 plans and other ways to save and pay for college is Saving for College.
2 comments:
Good for you for doing the "financial housekeeping". I need to do this, too. When I opened 529s for my son, I was overwhelmed with all the different states, not to mention being a new parent. I finally decided to just go without state's plan, even tho it doesn't have state tax benefits, just because it seemed good enough and nothing else looked any better.
But I'm thinking of moving it. I want to get my MBNA card changed to the one that gives a 2% rebate on all purchases if you have the rebate go straight to a Fidelity 529 account. My other investment accounts are with Fidelity, so I might switch to the Mass. plan or something just to use a Fidelity account.
That's the easy part. I also opened a pre-paid tuition plan that I'm now regretting. Unfortunately, the pre-paid plan is in my spouse's name, and the investment 529 account is in my name, so it is harder to make changes to the pre-paid one.
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