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2StepsFwd1StepBack
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529 Question  Reply with quote  

Wasn't sure where to post this.

I have a question about 529s. I currently have a 529 set up for my daughter. It is NOT my state 529, so I am not realizing the tax benefit. The historical return on the 529 with which I went was much better than my state's 529's historical performance, even taking the tax credit into consideration. However, that was a few years ago, prior to the economy downturn. I am thinking of moving to my state 529 at this point. My questions:

Can I "rollover" the money from the out-of-state 529 to the in-state 529 without penalties? If so, should I? Or, should I just leave the money in the OoS fund and simply start contributing to the InS fund?

Thx in advance for your help.
2SF1SB
Post Sun Feb 05, 2012 2:09 pm
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coaster
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You can do that once a year without penalties:

http://www.savingforcollege.com/articles/when-should-you-switch-529-plans

~Tim~
Post Sun Feb 05, 2012 7:00 pm
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2StepsFwd1StepBack
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Thanks, Tim. I thought I had pretty sharp search skills, but I missed finding this site.

This is, actually, an emotional issue for me.

My FA would like me to stop contributing $50/month to the 529 and redirect the $50 to my 401k (remember my initial perfect storm post... not currently contributing to retirement). I can't bring myself to do that because I feel I would be "punishing" my daughter for my mistakes in life: The suspension of my contribution to my retirement is a direct result of my divorce mess. Further, when my ex and I divorced, agreement specifiied that we would split the amount in the 529 we currently had for my daughter and each set up our own 529. My ex did not - she spent the money and has not restarted any college savings for her. So, any financial assistance for college will have to come from me.

I realize the general thought among retirement planning is "pay yourself first", but under the circumstances, I can't bring myself to do it.

Thx.
Post Mon Feb 06, 2012 10:21 am
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littleroc02us
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Your lucky your state offers tax benefits, Minnesota does not and that is one of the reasons I went with the UESP plan, plus they have low fees.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Feb 06, 2012 2:24 pm
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coaster
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Your advisor should be able to run some scenarios for you, so you can see what the projected results are with the contributions going to different funds in different amounts. Might help to make decisions when you see the numbers in black and white.

~Tim~
Post Mon Feb 06, 2012 4:18 pm
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2StepsFwd1StepBack
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quote:
Originally posted by coaster
Your advisor should be able to run some scenarios for you, so you can see what the projected results are with the contributions going to different funds in different amounts. Might help to make decisions when you see the numbers in black and white.


Yup, he and I are planning to revisit the scenarios soon. Last did it in 2006 when I moved away from "joint" advisor with ex-wife to my own, post-divorce. This one is a friend, and I trust him. Only reason I'm on this site is because I wish to learn and don't expect him to be at my beck-and-call considering my portfolio is not robust (although he doesn't mind). He moved out of state a year ago, but I still use him. Planning to use use Google + for video conf calls at our next meeting! lol!
Post Tue Feb 07, 2012 11:52 pm
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Mogaba3
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Very interesting and superb thread it is. I like this very best and amazing sharing too much. Incredible work done it is
Post Fri Apr 06, 2012 2:16 am
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franks.benjamin
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If you didn't do this then US Tax department never leave you...They will make a strong case on you and may be you'll go to jail.
Post Fri Apr 13, 2012 7:25 am
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