I have two Texas Tuition Promise accounts, each worth about $41K in today's dollars. Already paid for, grows at a basic rate. No taxes. No other expenses associated with it.
Essentially they're both assets that probably/maybe will grow at 2%-6% annually and guarantee fully-covered tuition to any public Texas university for four years.
What's the optimal way to include them?
Thanks.
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You should be able to use the 529 plan folder to handle this. I would need to know a lot more of the details on the withdrawals to be able to give better suggestions, e.g., what happens to anything left over after the kids go to school, etc.
Best,
Dick Munroe
Thanks for the quick response.
They're set to pay the tuition of whatever is the most expensive Texas public university at the time my kids go to college. If they attend a Texas public university, then that's it, far as tuition & fees go; i.e. Expense = Income and I use regular 529 accounts to save up for ancillary college expenses such as room and board, books, etc.
If they go outside Texas or to a private Texas college, then the plan pays out on some assumed market growth rate since I put that money in, which was roughly 13 and 15 years before they go to college.
Anything leftover can be rolled into a 529 account or refunded, subject to taxes on gains.
Is that sufficient?
I've passed this on to Larry to see if he has any suggestions.
I would set up several 529 accounts, one for each of the Texas Tuition accounts and one for each of the 529s you're using for ancillary expenses.
Assume that when your kids start college the tuition comes out of the Texas Tuition accounts (you'll have to guess the tuition amount based on local knowledge). Pay the ancillary stuff out of the 529 accounts (again, you'll have to guess the amount based on your local knowledge).
Start there and see what happens.
Best,
Dick Munroe