Can you briefly describe a college 529 plan to me? And where I can open one?

Question

Can you tell me how a college 529 savings plan works? Where can i open one? And if i start saving the day I have a child and put 100 a month into the account what will I have by the time they turn 18? Thanks

Answer 1

Dont like them, too many fees, not enough savings options, grow too slow and you can save on your own

There are only 3 Good 529 Plans, all the others are awful!!
Alaska College T. Rowe Price T. Rowe Price 0.87% - 1.03% Excellent Alaska does not have state income tax
Nebraska College Savings Various 0.69% - 0.97% Good Up to $1,000 per tax return ($500 per married-filing-separate return).
and Utah Educational


Depending on the State and where you live, a 529 is a savings plan to allow you, your family, grandparents to save tax free for college or any other education for a child or a yound adult.
PrePaid Tuition Plans are a better idea.
SECTION 529 EDUCATIONAL-SAVINGS plans have been criticized over the past few years for high costs, complex fee structures and inadequate investment options. But lately, some plans are taking steps to address these concerns, according to Morningstar's latest "Best and Worst 529 Plans" report issued earlier this week.
More than a dozen states have cut their fees in 2005, according to the report. Maryland's College Investment Plan, for example, is dropping its $75 enrollment fee and cutting its management fee by 10 basis points to 0.28% as of July 1, 2006, the report says. (The plan's underlying mutual funds still charge between 0.48% and 0.72% in expenses.) Another plan, Arizona's InvestEd Plan, managed by Waddell & Reed, has cut its asset-based costs from a previous range of 1.56% to 1.66% to between 1.08% and 1.18%.
Another step in the right direction: Previously criticized for burying information about fees in 200-page prospectuses, most 529 plans now follow standard disclosure guidelines issued by the College Savings Plan Network, an industry group. This means that comparing different state plans is getting easier for consumers, as the plans are now encouraged, though not required, by the CSPN to list their various fees and expenses in easy-to-understand standardized tables.

Answer 2

A 529 plan is a tax deferred way to save for a child's college ed. They are named for the IRS code 529 that established them. Every state has at least one 529 plan and depending on the state you live in, you may be able to take a state tax deduction on your contributions. Some states also offer state tax credits or state matching grants as well. A good place to start if you're investigating 529 plans is www.savingforcollege.com.

If the state you reside in does not offer any particular state tax benefits, you are free to choose any 529 plan that you like. They all have the same federal tax benefits, and the students are free to attend any accredited college, university, or trade school in the US, and even some schools abroad as long as the schools are accredited to grant degrees recognized by the US department of education.

As far as choosing a plan, you want to weigh fees, investment selection, past returns, and any state tax or matching benefits. Once you have chosen a plan, you can usually enroll on-line.

As far as projected earnings are concerned, if you invest $100 per month for the next 18 years, you could have about $46,500. This calculation was done assuming $100 per month for 18 years at 8% per year.