09-12-2009, 03:27 PM | #1 | ||
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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Florida Prepaid College Fund advice sought
So Im thinking of signing up for this since Aiden Roth will be here in November and there are 3 options:
Prepaid Tuition Plans Single Payment Plan Monthly Payment Plan 5-Year (55 Month) Payment Plan 4-Year State University $14,359.77 $95.80 $280.36 2-Year Community College Plus 2 Years State University $12,254.37 $81.76 $239.26 2-Year Community College $4,972.20 $33.17 $97.08 Thoughts? Suggestions...Advantages/disadvantages......all of the above are doable although the one lump sum would be a real ass kicker to the balance sheet. Im looking for some advice here that maybe you parents or financial gurus might know. thanks in advance... Florida Prepaid | Prepaid College | Florida 529 Plans
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Jacksonville-florida-homes-for-sale Putting a New Spin on Real Estate! ----------------------------------------------------------- Commissioner of the USFL USFL Last edited by Flasch186 : 09-12-2009 at 03:35 PM. |
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09-12-2009, 04:36 PM | #2 |
Red-Headed Vixen
Join Date: Oct 2003
Location: Phoenix, AZ
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Flasch, why are you 1) Only considering prepaid plans? and 2) only focusing on Florida?
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09-12-2009, 06:19 PM | #3 |
Hall Of Famer
Join Date: Dec 2003
Location: the yo'
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For the cost of a KIA payment the 5 year looks doable. What are the disadvantages though? Transferable to another family member? Say he gets into Harvard. Are you out all the money?
If you put 4K a year into another savings fund would you feel less restricted? |
09-12-2009, 06:21 PM | #4 | |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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Quote:
1) Prepaid guarantees tuition (locks it in) as opposed to investing to try to catch up to what it could be... 2) in state.
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09-12-2009, 06:23 PM | #5 | |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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Quote:
Disadvantages? I guess I could invest it elsewhere and perhaps make more? Transferrable? No, but refundable yes. Harvard? No, I would get my money back (without interest, I think) 4K, probably more worried that a downturn in an investment timed wrong could prevent him attending OR my investment not keeping up with costs of tuition...
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Jacksonville-florida-homes-for-sale Putting a New Spin on Real Estate! ----------------------------------------------------------- Commissioner of the USFL USFL Last edited by Flasch186 : 09-12-2009 at 06:24 PM. |
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09-12-2009, 06:25 PM | #6 |
Coordinator
Join Date: Jul 2004
Location: Pacific
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My sister lives in Florida and did this. She absolutely loved it. Got one kid through University of Florida and is getting another through a community college right now.
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09-12-2009, 06:58 PM | #7 |
Grizzled Veteran
Join Date: Nov 2006
Location: Backwoods, SC
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Historically speaking college tuiton rates will not keep track with very good CDs, much less things like the S&P 500...then there is always the concern that kid decides no college for me, or you need the money in the interim...
If itt were me (and obviously its not) I would set up an acccount just for this purpose but not tie it up in a 529... |
09-12-2009, 07:06 PM | #8 | |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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Quote:
If the kid decides not to go you get it back but I think would lose out on accrual. So youre saying setup a special savings account and put money in on your own?
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09-12-2009, 07:28 PM | #9 | |
Red-Headed Vixen
Join Date: Oct 2003
Location: Phoenix, AZ
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Quote:
We chose to go with a 529 plan out of New Hampshire for Boy-Rahn. Our main concern was flexibility. We like the flexibility of school choice with the particular plan we chose. Boy-Rahn won't be restricted to Universities in our state. When he gets accepted to USC or Standford, we can use our 529 money there. Plus, with our 529 plan, if Boy-Rahn decides he wants to be a Marine and skips college, I can name another beneficiary of the funds, including myself, so long as they are relatives. I set up 529 plans for my sister's kids and set a little money aside for them every month. Last edited by Farrah Whitworth-Rahn : 09-12-2009 at 07:31 PM. |
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09-12-2009, 07:38 PM | #10 |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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Why NH?
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Jacksonville-florida-homes-for-sale Putting a New Spin on Real Estate! ----------------------------------------------------------- Commissioner of the USFL USFL |
09-12-2009, 07:44 PM | #11 | |
Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Quote:
sounds very interesting. what plan is this - can you name it?
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09-12-2009, 07:46 PM | #12 |
Red-Headed Vixen
Join Date: Oct 2003
Location: Phoenix, AZ
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A couple of reasons.
We liked the managed portfolios offered - they were better than the Arizona 529 plans. There are no state tax consequences on withdrawals from the plan for out of state participants. Arizona does not tax qualified withdrawals of residents, regardless of what plan you're in. But some states tax withdrawals if you have a plan in that state but don't live there. And at the time they offered a credit card where 5% (I think) of your purchases were deposited into the plan as a kind of cash reward plan. I thought that was kinda cool. I used this website for a lot of my research: Savingforcollege.com - The internet guide to funding college and Section 529 college savings plans. |
09-12-2009, 07:47 PM | #13 |
Red-Headed Vixen
Join Date: Oct 2003
Location: Phoenix, AZ
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09-12-2009, 07:49 PM | #14 | |
Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Quote:
don't go trying to dig it up right at the moment or anything - i can check out that website and probably figure it out too, but if you happen to come across the prospectus or a statement or some sort of something that might be cool - it sounds like a pretty flexible plan and although i'm childless it might be nice to do something for say my two little nieces who are 5 and < 1.
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09-12-2009, 08:01 PM | #15 | |
Red-Headed Vixen
Join Date: Oct 2003
Location: Phoenix, AZ
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Quote:
That would be very thoughtful of you. I put a little away and I know it won't be a lot for them when the time comes, but it's more than my sister has the ability to provide. At least it's something. We actually started the plan for Boy-Rahn well before we were surprised with the news we were having a kid. I named myself as the beneficiary, and then changed the beneficiary once he was born. Once I make it through my deadline on Tuesday, I'll look for my most recent statement. Last edited by Farrah Whitworth-Rahn : 09-12-2009 at 08:01 PM. |
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09-12-2009, 08:02 PM | #16 | |
Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Quote:
that's my plan actually...little bits for each of my nieces (although hopefully my sis and her husband will be okay) and one like you did where i have it "ready and waiting" in case I ever do end up having a kid (unlikely)
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Get bent whoever hacked my pw and changed my signature. |
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09-12-2009, 08:14 PM | #17 |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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found that it is tranferrable out of state and to other kids.
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09-13-2009, 07:05 AM | #18 |
College Benchwarmer
Join Date: Jan 2003
Location: Hartford
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My concern with the Florida plan would be that the state could honor their end of the deal 18 years from now. At least in something like Social Security in theory you'll always have workers to tax. If the residents of Florida stop signing up for this program how does the state make up the gap between what today's people prepay versus what the costs are 18-22 years from now.
Of course you might better off having someone in the program, since they will have to invent new taxes to cover the liabilities, and if you are going to get stuck paying for others you may as well get some benefit from it. |
09-13-2009, 09:55 AM | #19 |
Torchbearer
Join Date: Sep 2001
Location: On Lake Harriet
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I would read the fund documentation very carefully. You might also want to do some research on the Alabama PACT fund, which is embroiled in litigation right now, and may run out of money in the next 5-7 years. Compare that to Florida to see how it is run.
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09-13-2009, 10:06 AM | #20 |
Coordinator
Join Date: Sep 2004
Location: Chicagoland
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We're doing this with Illinois for little Sam. We made sure, however, that it was transferable, and if he goes private, we get the cash equivalent.
We went with this option over 529s or just putting money into a generalized savings account for the following reasons: 1. Given the rate that tuition has increased, we're unlikely to find investment vehicles that match that rate of return. So the value of that prepaid tuition will be higher when Sam goes to college than if we had just dumped the money into a 529 or investment fund. It's also a lot less risky than simply investing the money, especially if we're headed for a 10-year or even 5-year recession. 2. The problem with 529s and just socking money away, to me, is that when the little guy eventually applies for financial aid, any and all assets he and his immediate family have will count against him. Given the way tuition has increased and the pool of money for loans has decreased, it's more-or-less a way to guarantee him getting nothing from the FAFSA process. (Having said that, both of us make good money so he probably wouldn't get anything anyway....) Thanks very much to Farrah for the advice, however, and I'll be checking in to learn more. I'm not an accountant or a financial adviser, and this is obviously a big thing, so it remains of interest to me. |
09-13-2009, 03:40 PM | #21 |
SI Games
Join Date: Oct 2000
Location: Melbourne, FL
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Can I ask what exactly this plan covers? - its possibly my kids will be going to university here in America and we're currently located in Florida so its of personal interest to me.
I believe the 'Bright Futures' scholarship which the state does covers the majority of college costs if they attend a university within Florida - am I correct in this and if so what do these savings schemes cover? |
09-13-2009, 04:37 PM | #22 |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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well if Im reading right, and briefly, I notice GPa and min SAT/ACT score requirements where this doesnt. For one.
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11-25-2009, 02:31 PM | #23 |
Coordinator
Join Date: Sep 2004
Location: Chicagoland
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Bump for a good thread and because we're about to pull the trigger on Illinois' program. Details here and here.
I dredged up this thread to check Farrah's post as to why she picked NH and confirm that I was looking for the correct features in IL's plan. So, I confirmed that we can transfer beneficiaries or get a refund, and there's some flexibility on when he uses the funds (and the funds are disbursed directly institution anyway). My concerns are, generally: 1. If the fund runs out of money, its recourse is to the IL legislature. Given the state of our budgets lately in the state... However, the fund is supposed to be "conservatively" managed, so.... 2. If we move out of state we can no longer contribute with a tax advantage. I'm going to check out some other plans, but I have only a limited amount of time for research and everything I've checked out looks OK. It still seems preferably to just socking money away. Also, on an unrelated note, has anyone noticed that these plans are basically Ponzi schemes? The benefits that are paid out now are dependent (at least in part) on money coming in now, which fits the definition (if you ignore interest on investments, of course). Maybe I have the definition wrong, but I thought it was funny. |
11-25-2009, 02:33 PM | #24 |
Coordinator
Join Date: Sep 2004
Location: Chicagoland
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11-25-2009, 02:39 PM | #25 |
College Starter
Join Date: Oct 2000
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you all still think college will exist in 15 years?
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12-02-2009, 01:04 PM | #26 | |
Hall Of Famer
Join Date: Apr 2002
Location: Back in Houston!
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Quote:
I thought I heard a story on NPR that quite a few 529s lost a bunch of money over the past 2 years and it wasn't just Alabama's that was in danger of defaulting. SI
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12-02-2009, 01:05 PM | #27 |
Hall Of Famer
Join Date: Apr 2002
Location: Back in Houston!
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I'm sure learning how to scavage for food in a post-apocalyptic world from a grizzled crazy ol' timer and joining a mercenary gang to learn how to shoot is still covered SI
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Houston Hippopotami, III.3: 20th Anniversary Thread - All former HT players are encouraged to check it out! Janos: "Only America could produce an imbecile of your caliber!" Freakazoid: "That's because we make lots of things better than other people!" |
12-20-2009, 08:15 AM | #28 |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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So we signed up for 2 things:
We did the florida Prepaid plan for tuition, to be paid in 5 years as opposed to one lump sum because it was only about 1 thousand more over 5 years and not the 18 year plan because that differential was way too high the other way. We also set up a 529 for the extra stuff where people can put in gifts or we can dump extra monies over time. I liked the guarantee of the Prepaid but wanted to add the 529 for the additional things.
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02-01-2010, 09:38 PM | #29 |
Coordinator
Join Date: May 2002
Location: Jacksonville, FL
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I have a bit of a dilemma now.
I signed up for the 5 year plan on the prepaid and its about $350/mo. However, im getting a bigger than expected tax return this year and am wondering if I should change to a 1 time payment and save the ~1500 in interest over the 5 years (~10% in financing over the 5 years or 2%/yr). Think maybe borrowing the $ at that % isn't a bad idea or is this sort of anti-investment (in normal terms) not one that can be looked at as simply an interest issue?
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