How many 529 accounts?

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silvergga
Posts: 271
Joined: Tue Mar 06, 2007 6:58 pm

How many 529 accounts?

Post by silvergga »

I am in California, so no state deduction on 529 accounts. I have 2 kids who are 4 years apart, so by the time the younger one become a freshman, the older one will have already graduated.

Is there any reason for me to start 2 529 accounts? Or will 1 529 suffice? We can just change the beneficiary from the older kid to the younger kid when the older kid graduate, correct? Also, we won't get gifts earmarked for a specific kid's college expense - it will always be a gift "for the 2 kids' future college expense".

Thanks.
MarvinK
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Re: How many 529 accounts?

Post by MarvinK »

I have three nieces and nephew (siblings) in Florida who I researched accounts for.
The kids are currently toddler to grade school.
Discussion in the family was one shared account or separate.

Ultimately we decided to set up three accounts.
Sense of ownership and skin in the game when they get older.
We are going to tell them that they have accounts, when they are old enough to understand saving.
-The kids could direct some of their part time work/lawn mowing/babysitting to their account
-If the kids got a birthday check, it would go into their account.
We hope that all go to a trade school, college or university.
The owner is still their Mom, and could choose to redirect the funds to a sibling if situation is dire.
In this case it is unlikely that the accounts will reach six figures.

However we did seriously consider one account. It's easier to administer!
And changing beneficiary as a plan we did not find any drawbacks.
The only other thing that comes to mind is if your two children are in college at the same time.
Say the older child chooses to do a gap year, or Americorps first, then college.
Or has a 5 year undergrad program like architecture or accounting.
Also I imagine the financial aid forms FAFSE, et al. and formulas will change in the future, we don't know how, but certainly they will change.
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beyou
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Re: How many 529 accounts?

Post by beyou »

I had created one for each and it was truly not necessary.
Only benefit would be if the kids are in school at the same time and you want to spend on both of them.
Even then, you can open a new acct at the time and roll $ from old consolidated acct to new temporary acct.
Would not bother now.
livesoft
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Re: How many 529 accounts?

Post by livesoft »

Suppose you die. What happens when the owner of a 529 account dies? Will the child without one get short-changed?

We had 2 accounts for each of our children which allowed us to tax-loss harvest one of the accounts for each child after the 2008-2009 thing.
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noco-hawkeye
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Re: How many 529 accounts?

Post by noco-hawkeye »

We did an account for each kiddo.

Your state might have an automatic age based portfolio - I'd see that as difference. So the younger kiddo stays aggressive a bit longer. and the older kiddo goes more and more into bonds and conservative choices.
noco-hawkeye
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Re: How many 529 accounts?

Post by noco-hawkeye »

Also - I don't see the book keeping as all that much work. It's trivial to setup a 2nd account and report contributions for it. Plus, you can try to setup some degree of equality or fairness if you contribute into both equally.
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UpsetRaptor
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Re: How many 529 accounts?

Post by UpsetRaptor »

A couple reasons why you may want two:
1) If anybody (you, a grandparent, etc) ever wants to contribute >$15K in a year, having multiple accounts may help make things simpler, from a gift tax exemption scenario.
2) Age-based portfolios for each kid.
3) Livesoft's point about what happens if you die.

If none of those are a concern to you, then you can probably get away with one. The fungible intra-family options within 529s are quite nice.
snowox
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Re: How many 529 accounts?

Post by snowox »

johne417 wrote: Wed Dec 20, 2017 10:13 pm A couple reasons why you may want two:
1) If anybody (you, a grandparent, etc) ever wants to contribute >$15K in a year, having multiple accounts may help make things simpler, from a gift tax exemption scenario.
2) Age-based portfolios for each kid.
3) Livesoft's point about what happens if you die.

If none of those are a concern to you, then you can probably get away with one. The fungible intra-family options within 529s are quite nice.


4 kids 4 accounts. You can always trickle the money down if need be. Our reasoning was different risk strategies for their age. 2 are off to college now basically 19 and 18 and then we have 2 13 and 12. Both were 18 months apart. The older ones their portfolios were set to become more conservative as they got closer to graduation while the younger ones are both still on a more aggressive portfolio. The older ones both got full or part scholarships out of state for athletics and didn't need all there money so now we were able to roll down to the two younger ones and no have no need to fund them anymore. And our goal to was to only bring to a level where they still had skin in the game.
Topic Author
silvergga
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Joined: Tue Mar 06, 2007 6:58 pm

Re: How many 529 accounts?

Post by silvergga »

Thanks all for the great replies!
Luke Duke
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Re: How many 529 accounts?

Post by Luke Duke »

Each of my kids has a separate account. I use the Utah 529 and there is no extra work to maintain multiple accounts.
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