Welcome to the forum!I have a five year old son and want to start saving up for his college education. I can already tell he is very smart and college material. I'm looking into the 529 fund and want to hear what you recommend. I live in Alabama. One person suggested even with the tax deduction it may be better to invest in other states that have historically had higher yields and then transfer to Alabama when he's a junior in high school.
It a 529 fund a good idea to start with? It is worth looking at investing in other states?
Thank you for any input!!
The College Counts 529 Plan is the State of Alabama's Direct Plan, sold to individuals. The state offers a $5K/$10K deduction for single/married filing jointly taxpayers. Given the state tax rate varies between 2-5% based progressively on income earned, assuming you make the maximum deductible portion you could hypothetically save a few hundred dollars per year you are in the plan.
Given the time horizon, I would go with the age-based aggressive plan, which would migrate into an 80/20 diversified plan from age 6-8 before toning down the risk levels. https://www.collegecounts529.com/perfor ... -ages-3-5/
https://www.collegecounts529.com/perfor ... -ages-6-8/
You could look at other states, but you would be giving up the annual deduction. The majority of the funds offered in the plan are Vanguard's and the overall plan fee does not appear onerous. The key though is to buy the plan direct, don't go to an advisor sold plan which will likely come with additional expenses.
Statistics: Posted by Grt2bOutdoors — Thu Sep 26, 2024 8:14 pm — Replies 3 — Views 193