Changing our 529 investing plan

I’ve been researching fees and tax strategies, and I’ve decided to move our 529 plan from Fidelity to our state’s direct plan (Virginia inVEST).  The fee is .02% higher for the aggressive portfolio I selected, but the up to $4,000/year with unlimited carryover deductions on state taxes more than makes up for the fee.  There are also a *lot* more investment options in the Virginia plan than there are in the Fidelity NH plan.  I’ve opened up the account and made the initial deposit, but I need to file the paperwork (on paper!) to transfer the old 529 account into the new.  I didn’t realize that you could transfer 529 plans until I started researching it – I figured we were “stuck” with the initial choice (which I admit to having selected Fidelity because all of our other accounts are there).

I like Fidelity, their 529 plan is very easy to manage and I’m keeping my other accounts there, but the tax savings of moving were too enticing.  We currently contribute $600/year of our own money plus whatever Daughter Person gets for her birthday/Christmas (is usually another $600 or so from various grandparents).  We intend to increase that significantly (into the $400-$500/mth range) once our debt is paid off so that we can completely fund her college for at least an in-state school.

I know that there are differing opinions on whether we should pay for her college or not, but we feel very strongly that we should pay for her undergraduate education at an in-state school.  If it comes down to it, we’re going to prioritize retirement over college, but hopefully, we plan better than that.

4 thoughts on “Changing our 529 investing plan

  1. Pretired Nick

    We’re all over the map on our 529 plan. Latest thinking is that it’s silly for us to pay for his college, but we’ll see. He’s only a year old, so we have a little bit of time at least!

    1. Mom Post author

      We’re not putting aside much right now – $50/mth, and whatever grandparents give her for birthday/Christmas/etc. We’re hoping to pay for at least in-state tuition for four years, but other than that, she’s on her own. We’re definitely planning on increasing the contributions once debt is paid off, but not until then.

  2. Brad @

    We struggle with how much to save in the 529 plans as well (we also use the Virginia inVest program, which is well regarded). For a while we were putting in $75 a month for each of our two daughters and now we’re up to about $200 per month each I believe.

    I need to learn more about the specific mechanics of college financial aid, as I feel there are ways to manage it better to qualify for as much aid as possible (I think they mostly look to income, but they do assess a certain percentage of your assets, but exclude home equity and maybe retirement plans. So there’s definitely some play there if the rules allow for it…)

    With the University of Virginia and William and Mary (among many others), we have absolutely world-class colleges here in VA, so it’s highly likely our girls will attend those schools. There’s maybe 10 universities I’d feel might be worth paying for if they were to be accepted, but that’s about 13 years off, so we’ll see what happens…

    1. Mom Post author

      Virginia schools are reportedly great (neither Dad nor I graduated from school in VA) – and locally we have George Mason as well. While we’re pretty sure we’re going to stay in Fairfax County until Daughter Person graduates from high school, that’s still a long way off. I don’t hold much hope for Daughter Person getting any need-based financial aid – not if Dad and I are still working. I only qualified for loans during grad school because they don’t consider parents’ income/assets at all.


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