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How are you today?
hi i am well - thanks!
Are you looking to open up a 529 plan?
yes i think so
Okay so how that works is you place money into the account. You don't get a tax deduction on those funds, but when you take money out you are not taxed on the gains
the idea is to start when the children are young, and then allow the investment to grow so that you have lots of tax free gains
Basically your investment options are the same as they would be for any brokerage account
You can invest in the stock market, bonds, etc
You could open the account at any brokerage firm...like you mentioned Fidelity, Wells Fargo, Charles Schwab, etc
Is there anything in particular you would like to know?
does the brokerage firm make a difference? or do they all offer the same plans?
Well all the plans will be similar, although different managers will manage the funds so their portfolio could vary slightly
You can have a plan that's invested only in one mutual fund, if you wanted
and i heard something once about different plans by state -
is the state something to consider?
https://www.wellsfargo.com/investing/education/529 - Suit Payments to your Budget: Access to over 30 plans offered, Wells Fargo Advisors makes saving for college easier with low minimum contribution options available to meet your college savings goals.
Yes your state will have different options
If they have over 30 plans how do i decide which plan?
Well, you will have to get a breakdown of each and then choose one that fits your risk profile
my kid is 2 and i'm having another in March so ready to start early :) Just want to make sure that i'm asking the right questions when i go into the Wells Fargo near me.
Do you want low risk investments that get lower returns, or high risk investments that could have high returns (or losses)
well i imagine like my 401k since they are young start higher risk and gradually make lower risk as they approach college age?
You can do that
That's called an aged-based option
should i definitely do this in my state? or is it better to have a family member open in a different state?
I would just do it in your state. It won't make that big of a difference
so then the different "plans" mentioned on the WF site are likely referring to different investment plans (eg. age based, risk level, etc)???
Yes. You'd have to go over all of this with the Wells Fargo personnel
Is there anything else you need assistance with today?