There are big drawbacks to 529 plans. The money is counted against the kid for financial aid purposes. If you haven't maxed out your 401k, IRA, and Roth accounts it is better to put the money there first then do an early withdrawal.
Currently, financial aid eligibility isn't affected much by 529 plans (college savings plans or pre-paid tuition plans) because these plans are considered part of the parents' assets in the calculation of the Expected Family Contribution (EFC) toward college costs.
http://www.petersons.com/college-search/529-plan-pros-cons.aspx
Interesting. My understanding was that the 529 counted as the kid's assets and was given a different weighting in the financial aid formulas than the parent's assets. According to your link that's not correct.
+1 529 except that we've lost our ASS with out state program.
My "solution",
k5-12, A's ( so far, 2-5th, straight A's)
SAT....as high as possible.
Helps that the boy takes after his Mom and he's in the best private school in the area. Pay now, hopefully, save later.
Do 529s have penalties of some sort if your kid goes to college out of state?
+1 529 except that we've lost our ASS with out state program.
My "solution",
k5-12, A's ( so far, 2-5th, straight A's)
SAT....as high as possible.
Helps that the boy takes after his Mom and he's in the best private school in the area. Pay now, hopefully, save later.
because it's not 529's only count some 5.x% towards the kids if the 529's are opened by the parents with the kids as the beneficiaries. if you wanted to kill that and have trustable parents, 529's under the grandparents count 0.