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Louisiana 529 Start & Start K12 Program
Posted on 1/8/24 at 4:41 pm
Posted on 1/8/24 at 4:41 pm
Have a 9 month old and his grandparents have started giving "education" gifts for holidays and whatnot and also want to help in some form or fashion with tuition/education expenses in the future. I have an LA START account that I opened 7 or 8 years ago with some extra cash (my niece was a beneficiary until I had my child). I see now that they added a K12 START plan with fewer benefits but that can be used for K-12 tuition. Few questions:
1. What is the best way for a grandparent to help pay for educational expenses for their grandchild? Pay the school directly, contribute to the START K12 529, pay me then I pay the school, pay me then I put it in the START K12 529? Just trying to figure out the best way to do it with the least headache.
2. Is the START K-12 program worth it without the tax deductions and earnings enhancement that the normal START program has?
3. Does having a nest egg in the START account affect financial aid for college and if so how significant is that effect? Enough to make it not worth doing?
4. Is there anything else I should be aware of regarding 529's or paying for a child's education?
Tough to parse everything out there and noticed that a lot of things have changed in the last 5 years.
1. What is the best way for a grandparent to help pay for educational expenses for their grandchild? Pay the school directly, contribute to the START K12 529, pay me then I pay the school, pay me then I put it in the START K12 529? Just trying to figure out the best way to do it with the least headache.
2. Is the START K-12 program worth it without the tax deductions and earnings enhancement that the normal START program has?
3. Does having a nest egg in the START account affect financial aid for college and if so how significant is that effect? Enough to make it not worth doing?
4. Is there anything else I should be aware of regarding 529's or paying for a child's education?
Tough to parse everything out there and noticed that a lot of things have changed in the last 5 years.
4
Posted on 1/8/24 at 4:46 pm to LSUDbrous90
All I can contribute is my parents and in laws just give me the money and I contribute it to my kids' 529's. easier for me to manage it that way.
Posted on 1/8/24 at 8:28 pm to LSUDbrous90
Might need someone to confirm this, but I just opened two in November.
$2400 is tax deductible per person. So you can do $2400 and grandma could do $2400, etc.
When you open it, you choose how you want to seed it, whether recurring direct deposits or mailed in checks.
You pick where you want to allocate/invest the funds.
They just changed the Roth IRA rules so after college they can roll over up to $35k lifetime if they haven’t exceeded the yearly contribution limits. If there’s still any leftover after that, they can pass it on to their children.
$2400 is tax deductible per person. So you can do $2400 and grandma could do $2400, etc.
When you open it, you choose how you want to seed it, whether recurring direct deposits or mailed in checks.
You pick where you want to allocate/invest the funds.
They just changed the Roth IRA rules so after college they can roll over up to $35k lifetime if they haven’t exceeded the yearly contribution limits. If there’s still any leftover after that, they can pass it on to their children.
Posted on 1/9/24 at 7:40 am to LSUDbrous90
I have a K12 account for my kids. It has made some money but nothing to brag about.
I would have them fund the K12 account assuming you need the money for private school. When the money is deposited, it can only be used for your child. That establishes security for your child.
Say if I saved $50k for school in a money market account, then I die or get divorced. Jody comes along and sees $50K and convinces the child’s insecure mom to get him a fully loaded side by side, or your ex decides to live life to the fullest and selfishly cashes out to get bolt ons. Your kid loses. These are extreme examples but it sheds light on the situation.
Also, what if the grandparents decide five years from now that they are not funding it anymore? The difference between them putting money in the K12 account vs them investing it on their own and writing you a check for tuition is that they can’t decide later to use the money for something else.
I would establish the account. You can likely make more money in other places, but to me it’s more about security for the child.
I would have them fund the K12 account assuming you need the money for private school. When the money is deposited, it can only be used for your child. That establishes security for your child.
Say if I saved $50k for school in a money market account, then I die or get divorced. Jody comes along and sees $50K and convinces the child’s insecure mom to get him a fully loaded side by side, or your ex decides to live life to the fullest and selfishly cashes out to get bolt ons. Your kid loses. These are extreme examples but it sheds light on the situation.
Also, what if the grandparents decide five years from now that they are not funding it anymore? The difference between them putting money in the K12 account vs them investing it on their own and writing you a check for tuition is that they can’t decide later to use the money for something else.
I would establish the account. You can likely make more money in other places, but to me it’s more about security for the child.
This post was edited on 1/9/24 at 7:43 am
Posted on 1/10/24 at 11:27 pm to LSUDbrous90
I really have no clue what I’m doing but I do put $25k a year into my kids 529. It’s going to be a pretty big amount when the kid gets to be college age but who knows how much college will cost by that time 
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