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Financial Planning / Paying For College
|Subject: Here's What I Did||Date: 9/15/2003 4:29 PM|
|Author: jtmitch||Number: 5538 of 8208|
I'm normally a poster on the Retire Early Home Page but have been lurking here for a while. We have an 8 month old granddaughter and have wanted to do something to get her college fund started. I researched the various options and decided to put a couple of grand into a 529 plan for starters. My plan is to add to it at birthdays, etc. but I figure if I later decide that another vehicle is better I'm not absoultely locked into the 529 for future contributions.
I'm a resident of MD; my granddaughter is a resident of VT. I could have gotten the tax deduction if I had used the MD plan (T. Rowe Price) but they have an up-fron $90 registration fee, $30 per year maintenance fee and annual fund fees very close to 1% (depending, of course, on the mix of funds.) VT uses TIAA-CREF which charges .80% per year. But I decided to go with Iowa which uses Vanguard for .65% per year.
- MD: Although T. Rowe Price is a good outfit, I didn't think the state tax deduction was that big a deal and the fees kind of annoyed me. (I can see why MD picked T. Rowe because they are a Baltimore firm.)
- VT: I have high regard for TIAA-CREF and have a lot of retirement and mutual fund money invested with them. But I thought they made the mix of investments a little more complex than they needed to. Also, if you pick the time-phased approach, they use 2 year bands and are a little more conservative in their approach than I thought was necessary.
- IA: Vanguard is my favorite financial firm and the bulk of my retirement money is with them. They had the lowest fees, used exclusively indexes for the investment mix and had 5 year bands. They also have 4 "tracks" within their time-phased approach that give you options from pretty aggressive to very conservative. (I picked the 2nd most aggressive track.) I also thought the IA plan was the most straightforward (maybe embodying mid-western values?)
Anyway, I'm not saying there are no other approaches, but thought I'd share what I did.
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