Well as some of you may know our family had a huge influx of small children a while back. Planning for how best to send all of these great kids to college can seem somewhat stressful at first, but after a little research, the task reviled itself to be much easier than previously anticipated… in fact it’s even turned into pleasant adventure…. lets do the math.
We figure for each kid we would ideally like to have $80,000 when they turn 18. We set out researching out options and it turns out there are literally hundreds of great companies to choose from here. In our situation going with a 529 college savings plan turned out to be the most beneficial. Obviously for tax reasons, this can vary from person to person, but in general for most people setting up a 529 plan will be the most beneficial. A full outline of our research is below for anyone interested:
Kids College Savings Plans Options
Calculator to show possible returns:
https://www.calcxml.com/calculators/529-college-savings-plan
The plans below are organized in order. I feel that option 1 is the “best” option, but each option below represents a substantial improvement vs just keeping the money in a bank account. So you can’t go “wrong” there are just some differences (mainly tax differences) between each option.
529 Plans:
These plans offer tax free growth, and tax free withdrawals on college related expenses. *The money can only be used for college related expenses, if it is not then a big penalty is paid. I view this as a bonus though because it will force all the kids to use the money on education which is our end goal anyway.
1.) Vanguard 529 Plan
A Vanguard 529 from missourimost.org (most tax benefits for you)
A vanguard 529 directly with vanguard
2.) Wealthfront 529 Plan
3.) Scottrade 529 plan
Traditional Brokerage accounts:
These plans offer more flexibility, the money can be used for anything. The money does not grow tax free though.
4.) Betterment/wealthfront
5.) Vanguard
6.) Scottrade