Hi nath,
Per your post....
"Your reply caught my eye.
Can we have open multiple 529 plans?
I live in CA state. I thought I was eligible only to open 529 plan in CA state. I can't go and open 529 plan of other states.
>>>>>You may indeed have a 529 via any other state, besides your own resident state. Investor noted in a reply that a benefit may be a tax credit for your home state 529 plan, so these is also something to consider, too.
For example 529 plan of Virginia can be opened by only virginia state residents. I found this a year ago."
>>>>>I did a quick look at Virginia, and it appears that non-residents may have an "investment 529". You may have read or saw something related to a "prepaid tuition program" for Virginia residents, which is a different type of state education plan, but I believe falls under the IRS 529 rules and regs.
Michigan has a similar "prepaid tuition program". Based upon an 8% annual increase in tuition each year in MI schools; this "contract" which has a monthly payment is equal to earning 8% per year on a tax free investment. And MI just raised the credit hours from 120 to 150 that will be covered by the contract, without an increase in the contract cost. When the contract is paid off in the childs last year of high school, it has to be started with 8 or 12 years (just changed this, too) after high school. The monies may also be used for non-Michigan schools, but the value would disappear faster with higher out of state credit hour fees. If the contract is not use, it may be cashed in and taxed at the rate of the contract holder, as income.
I believe the current year maximum contribution to a 529 is $13,000 per child/529. Obviously, the sooner one may start a 529, the better chance for the compounding affect of money growth to take place.
NOTE: Before I forget. If you Google 529 "the name of the state" forum you will likely find a discussion board not unlike here that will allow for questions and will already have answers to many questions. Michigan has a very nice forum for this topic. ALSO, the 529 we have in place is with UTAH and Vanguard index funds. Why did we not use the MI plan??? At the time, we were not pleased with the TIAA-CREF funds and fees. The company was on the edge of being tossed from MI and reworked both fees and choices. THIS is a very competitive market area and the big names want a piece of the pie. 529 plans improve each and every year. One may also perform a tax free rollover into another state plan, if you no longer enjoy the state you are currently using.
I will place a few links here that you may want to view. If you poke around enough, you will find a lot of info. As note before, a fair amount of info is available at savingforcollege.com . Some special info requires a membership; but you should find all you need with good searches and for free.
---IRS general questions and answers...
http://www.irs.gov/newsroom/article/0,,id=213043,00.html---Google links for multi plans...
http://www.google.com/webhp?hl=en&tab=ew#hl=en&sugexp=ldymls&xhr=t&q=may+i+have+multiple+529+plans&cp=29&pf=p&sclient=psy&site=webhp&source=hp&aq=f&aqi=&aql=&oq=may+i+have+multiple+529+plans&pbx=1&bav=on.2,or.r_gc.r_pw.&fp=ef963bc075ac3922---International schools that are qualified to accept 529 monies....
http://www.savingforcollege.com/eligible_institutions/index.php?federal_school_code=&school=&state=FC&year=2011-2012&order_by=school&go=Submit&mode=searchOK, bnath.....get that search going. You'll find enough info to keep you busy for many days.
FINAL: I am not an attorney or CPA; nor do I portray one in a tv series or feature movie. Do your homework.
Take care of you and yours,
Catch
Comments
Very kind of you to surf all these links for me.
I did my research on 529 plans a year ago and didn't like the performance of those plans. So I invested that money (lump sum) in India. My son is 7 years old now. So probably another 8 years from now I will start moving money to this country. The returns on Fixed deposits or mutual funds or much higher (ofcourse they have high inflation too) in India than in this country.
Thanks again.