I was looking at 529 plan for my younger chid, initially we did have plans to move out of the country but now things have changed and kids will finish their education here.
Wondering how do we decide which plan to chose - I did some reading and I see some are for public colleges and some are for private colleges. Given that admission process is “black box” , we want to have the choice to go to public or private. We are 5 years away for the younger child to apply for the college, what is my best option ?
If you are talking about a 529 investment plan, they can be used anywhere.
A prepaid tuition plan can be limited to your state schools or a certain consortium of private colleges. Prepaid tuition is risky if you do not know where child will go. You can get the money back but you will forfeit growth and may pay some penalty if they go somewhere else. Each plan is different.
You should see if there are any state tax advantages to using your home state 529 investment plan. If not, with only 5 years that is not a long time horizon so that tax benefit may be minimal. Most investment 529 use an age-based investment so as your child gets closer to college age, it is more geared toward bonds and you will not see much growth.
Being this close, if you will not be eligible for financial aid, it might just be best to invest on your own. You should consult your own accountant or financial adviser because everyone’s situation is different.