As soon as we received our infant son's Social Security number, we opened an account. That was back in 2008. Another account was opened in 2010 when our daughter was born. I am the owner of both accounts, s/he is the beneficiary. Given that pattern, it is possible to set up an account prior to the birth of a child. Once he or she arrives and gets a SSN, you just list them as the beneficiary. The benefits of 529s are numerous, but they are not the focus of this post. The focus is on the fact that as of October 31, 2012, the current administrator will step aside.
Assuming contract negotiations progress, the new administrator will be TIAF-CREF. Several factors remain unknown. As a result, I am not following the suggestions from Wells Fargo to make deposits as normal. What am I wondering about:
- Will the Vanguard index fund we currently use remain a fund option or will be forced to select something off of a new menu;
- What fees will be charged by both the administrator as well as the fund? Fees eat away at growth. They can be hard to spot and add up quickly.
- Will new beneficiary forms be required? Currently I own both accounts, my children are each a beneficiary, and my husband is the successor owner. Will those designations follow?
Our plan was to make our $6,000 (that comes out to $3,000 per child) annual contributions in August of this year. Instead, the money will be parked in an account until these questions are resolved. At this point in time it remains unknown if we'll continue with EdVest. Most likely we will, but trained to see problems on the horizon, this attorney is going to wait until the contracts are signed and the numbers known before investing more money with EdVest.
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