Is Florida Prepaid worth it? (2014, insurance, how much)

[Wordsmith12]

My daughter turned 1 recently and I've been doing research on Florida Prepaid/529 plans.

For those of you who've enrolled in the Florida Prepaid plan or know anyone who has, do you feel it's worth the investment?

Why or why not?

[FL_Expert]

That’s a very difficult question to answer. My opinion was no, but there’s a good case for it. I think the money is better spent on other investments. Also, it’s hard to say what the educational landscape will be like in 17yrs. Google type certifications may be more mainstream then instead of college.

[Marc Middleton]

We got ours in just in time in 2014 before a big rate hike. Our child was born Dec 29th so it was just in time You can now get a refund if they go out of state too, which is a change from the 90s.

Its a direct payment from a savings account that I don't think about. That's how we look at it!

[bale002]

Originally Posted by Wordsmith12

My daughter turned 1 recently and I've been doing research on Florida Prepaid/529 plans.

For those of you who've enrolled in the Florida Prepaid plan or know anyone who has, do you feel it's worth the investment?

Why or why not?

I did not view the prepaid plan as an “investment” but as an insurance policy. Take a moment to view it from that perspective, it might help understand its purpose and value more clearly.

I first enrolled two children before legislators halved the planned annual rate of tuition increase and I received enough of a refund to buy a new car.

A few years ago I received another refund, I don’t remember the reason why, maybe because at the State level the plan’s reserves are considered adequate.

Anyway, insurance policy, not investment. See if that fits better.

Good Luck!

[beach43ofus]

We lived in Georgia while rasing our family, so we did the Georgia 529, & it worked out perfectly for us.

I'm pretty sure the Florida plan is even better than GA's, because FLA's allows the students a much wider range of educaional options...FlA has more other states' colleges/universities on the reciprocal aggreement, so they can got to college elsewhere & still use the FLA fund. I think FLA's plan also applies to trade schools, certification classes, & many other ed options....not just traditional colleges/universities.

There's info about Florida's pre-paid plan here:

https://www.myfloridaprepaid.com

If you are disciplined, and do it each month, it will very likely cover almost all of the higher ed expenses. Estimate overall 4 year cost of tuition, matriculation, housing, & food costs. Divide by the # of months until they graduate high school to know how much to put in each month. We used the appreciation in the account to cover the rising costs of higher ed (inflation), and for our student to have a car, clothes, travel to/from college to home (he wasn't nearby). The plan starts the investments out with aggressive growth funds, then rebalance it to a safer bond-stock blend as time passes.

I strongly suggest staring this plan asap. Also encourage friends/relatives who want to gift your child to help in that manner the first few years because the more you put in early, the more it grows.

We also encouraged U.S. savings bonds for gifting. That is what our recent college grad is living on right now until his 1st job starts in mid-January. He also used some of those funds to pay for trips to London, an Alaskan cruise, Chicago, & a Mediterraean cruise, so he could see some of the world prior to starting his career....broadening his horizons.

The tax advantages of these plans are great too.

[ray1945]

I bought a 4 year university tuition plan for my grandson in September 2002, the month he was born, for which I paid a total of $10,740. He enrolled in a state university last year - his prepaid plan will cover $25,472 worth of tuition for his four years of attendance. So, yes, it's a good deal.

[FL_Expert]

Originally Posted by ray1945

I bought a 4 year university tuition plan for my grandson in September 2002, the month he was born, for which I paid a total of $10,740. He enrolled in a state university last year - his prepaid plan will cover $25,472 worth of tuition for his four years of attendance. So, yes, it's a good deal.

If that were invested and earned 7% per year, about the average for the S&P 500, it would be worth $41,560. So Florida prepaid isn’t necessarily compelling given the opportunity cost.