Last month, I created a plan to save $5,000 a year for my son’s college savings. With a 10% CAGR, a contribution of $5,000 per year should grow to $250,000 in 17 years. At that time, I didn’t know what was the best investment vehicle for this plan. After a lot of research, we finally took the plunge last night and opened a New York’s 529 College Savings Plan (Direct Plan). Our son is not due until this December, so we started the plan under my wife’s name (owner) with her as the beneficiary and myself as the successor.
The answer is yes! I first learn about this trick from Trent’s “A Prenatal College Fund?” We can start 529 Plan at any time and later change the beneficiary as long as he or she is a member of the family. This will ensure that we can enjoy the New York State tax deduction this year without worrying about our son’s exact birth date. This made me wish I had started this a few years ago.
I have been looking at various options, such as:
But none are as appealing as 529 college savings plan. Although, New York’s was not the best 529 plan, we felt that it was good enough; and the advantages for local residents are just icing on the cake. Here are some of the things that we liked about 529 plans in general, and New York’s in particular:
You can find more information about New York’s 529 Plan on their site.