Does a 529 make sense with education benefits? : personalfinance


My retirement savings are on track and I have no major debt beside my mortgage. I’ve been wondering if I should begin setting money aside for my kid in prep for college. I know 529s are highly recommended, but I’m trying to decide if it’s worth it in my case.

I work for a state university. As a full time employee, I get an educational benefit that is extended to my kid: tuition is waived is he decides to go to the college I work for. Room and board, books, etc would still be on us. I’d like to save something so we can at least cover those expenses. But since the goal isn’t covering full tuition, would it be worth it? I worry that the money may be needed by him for something other than school. Would a brokerage account be just as effective?

Some details:
-Salary is currently $68k
-Spouse is stay-at-home but plans to rejoin the workforce in a few years (she has a BA)
Kid is 5
-We live in a state with a well rates 529 and offers a state tax deduction

Given our income level and capital gains rates, it feels like a brokerage account may be simpler and, of course, more flexible. But maybe the fear of the 529’s penalty for non qualified expenses is making me miss the benefits.



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