Good reason to open a separate college savings plan for your child

Our son was just born, we also have a daughter who is 2 years old and a half. We have a 529 college savings account for her. We can save two children to college in the same account number 529, or each of them requires its own account?

You can save your two children in your daughter’s account, and then let your son after beneficiaries, but it is usually better to open separate accounts. “Every child a separate account makes it easier to track and appropriate investment,” Stewart Ritter, a certified financial planner at T. Rowe Price, which manages 529 plans said.

Open a separate investment account can help you locate a time frame for each child. Usually you put more active young children’s play N (mainly focused on equity funds), and then gradually move on to more conservative investments as a university student getting closer, so you do not have to worry about a downturn in the market shrinking savings, when University of bills you have to pay.

Whether you shift the portfolio yourself or you invest in an age-weighted fund, it will automatically re-allocated on the basis of this year’s children’s program of investment over time to go to college, the process becomes complicated, if you “re in an account to invest in different time frames. Without you so many problems now, because your child is only 2 years old half-open, you are investing in long-term for both of them. but as the date College come closer, especially for children who are aged longer becomes even more important.

You may also get a larger tax cut, if you have separate accounts. some states based on the number of beneficiaries of tax cuts in Maryland, for example, each account owner can be deducted from taxable income of contributions per beneficiary per year up to $ 2500 yuan from Maryland. If you are a saved account, you will be limited to your child in the $ 2,500 annual deduction (although you will have lasted over 10 years of contribution). If you have a separate account for each child, and help both sides, you can deduct up to $ 5,000 per year Go to, in order to understand the rules of your state.

Also have separate accountsClear how much money you give each child aside. “If what happened parent, people will be wondering why only a 529 account, instead of two,”’s CEO Joe Hurley said.

Check whether there are additional costs to open a separate account to see if you can get some fees waived. University of Maryland investment plan, which is given by the T. Rowe Price, an annual fee of $ 10 for each account, but if you register, so from your paycheck or bank account contributions to abandon the annual fee on a regular basis.