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Showerthought: picked a 529 over a brokerage account for my kid 10 years ago and it actually paid off
I went with the 529 for my daughter when she was born instead of a regular investment account, and after seeing how the tax-free growth saved us about $4,000 on her first year of community college in Austin, I'm glad I didn't overthink it, but now I'm wondering if anyone else regrets not putting at least some into a taxable account for flexibility?
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margaretk892mo ago
Tax free growth saved us about $4000" - that's awesome, we saw similar savings with our 529 for my son's second year. I did put a little in a taxable account too for backup, but the 529 was the main driver and it worked out fine. Would you go all in on the 529 again or mix it up different?
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betty_reed612mo ago
Why would you lock your money up in a 529 when you don't even know if your kid will go to college? My cousin poured $30k into one and then her son decided to join the military. Now she's paying a 10% penalty plus taxes just to get her own money back. That's nuts. A taxable account gives you way more flexibility. You can use it for anything - trade school, a down payment on a house, starting a business. The tax savings aren't worth it if you end up getting stuck. I'd rather pay a little tax now than risk having to beg the government to let me keep what's mine. Plus, if you invest in index funds long term, the taxes are pretty minimal anyway.
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