My wife has recently entered hospice after a long fight with colon cancer. We have three young boys (5, 3.5, and 3.5). Due to medical costs, we haven’t been able to save for their education. We’re expecting some monetary gifts from friends and family, and we’d like to invest this in 529 plans for their future education.
I’ve done some research but still have questions:
Should I go with Maryland’s 529 plan (with a $2500/child tax deduction) or a state like Nevada’s, which has lower fees and better reviews?
Does opening one umbrella 529 plan under my name, with the kids as beneficiaries, offer any advantages, especially for FAFSA or financial aid considerations?
Should I avoid Maryland’s prepaid trust plan due to the difficulties some parents report?
Would opening 529 accounts with Vanguard or similar low-fee providers be better, despite Maryland’s tax benefit?
Are there other plans or strategies I should consider?
Since my wife didn’t work in recent years, my kids won’t get survivor benefits from Social Security. I want to ensure I’m setting them up for the best possible future while managing these funds wisely.
With so many moving parts, consulting a financial advisor might be the best route. If you’re considering Vanguard, you could start there by setting up a meeting. Do you already have an accountant to help with tax-related decisions?
Edit: My spouse is also facing terminal illness, so I understand how overwhelming this planning can feel. I found my advisor through referrals, but you can check NAPFA.org for vetted fee-only advisors.
@Oakes
Thank you for the suggestion. I’m sorry you’re going through a similar situation. It’s difficult to navigate this alone. I’ll check NAPFA for advisors nearby.
Mckinley said: @Oakes
Thank you for the suggestion. I’m sorry you’re going through a similar situation. It’s difficult to navigate this alone. I’ll check NAPFA for advisors nearby.
NAPFA (Find an Advisor | NAPFA) is a great place to find highly qualified, fee-only financial advisors. Wishing you strength.
Double-check eligibility for Social Security survivor benefits. The requirements for survivor benefits differ from those for disability benefits, and they might still qualify even with a shorter work history.
@Zora
I lost my wife to cancer at a similar age, and my kids qualified for benefits even though she was a stay-at-home mom for several years before passing. It’s worth looking into.
I don’t have financial advice, but you sound like an amazing dad who’s doing everything to ensure the best for your kids. That’s a gift their mom would have wanted most.
Taron said:
I don’t have financial advice, but you sound like an amazing dad who’s doing everything to ensure the best for your kids. That’s a gift their mom would have wanted most.
Thank you for your kind words. No one can replace the love and presence of a mother, but I’ll do my best for them.
This might not be the right time to finalize decisions about 529 plans. You could consider parking the money in a high-yield savings account (HYSA) for now and revisit it when things settle.
Pat said:
This might not be the right time to finalize decisions about 529 plans. You could consider parking the money in a high-yield savings account (HYSA) for now and revisit it when things settle.
That makes sense. It’s been hectic with grieving, visitors, and planning. I don’t want to make a rushed decision I might regret.
Nicholas said:
Just a reminder to focus on what’s most important right now—spending time with your wife and kids. Financial planning can wait if needed.
Thank you. I appreciate your understanding and advice.
If you’re in Maryland, there’s another benefit to the T. Rowe Price 529 plan—a state contribution program that can match up to $500 based on your income. It’s worth looking into.
Keep in mind that 529 accounts are treated differently for financial aid. Funds in a parent-owned 529 are counted at a lower percentage than other assets, while retirement accounts aren’t included at all. You might want to prioritize maxing out retirement accounts before funding 529s.
Your children are young, and it’s hard to predict what their educational paths will look like in the future. For now, focus on your immediate needs and build an emergency fund if needed. You can decide on education funds later.
If you go with Maryland’s 529, you can claim the tax deduction and later roll over the funds to a lower-cost plan if needed. This way, you get the state tax benefit without locking into higher fees permanently.