Several people mentioned it in the other thread but it was so big I figured I would ask seperately. I have 2 kids under 3 and need to start saving for the college. What are the pros/cons of impact and what is the cost? Thanks
Mississippi MPACT
- Thread starter notoriousD_O_G
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The MS Treasurer’s website has a pretty extensive FAQ about it
It has a lot of pros since the cost of tuition is going to continue to rise. One of the biggest cons is that if your child is academically or athletically gifted and gets a scholly you can get your money back at that tuition rate, but you could have been investing that money and possibly gotten a better return.
It has a lot of pros since the cost of tuition is going to continue to rise. One of the biggest cons is that if your child is academically or athletically gifted and gets a scholly you can get your money back at that tuition rate, but you could have been investing that money and possibly gotten a better return.
The State also offers the MACS which is a 529, you invest it like a Roth IRA and it’s eligible to cover more expenses than MPACT.
529 is the way to go.
You have a greater return and more flexibility. Tuition increases are going to flatten out in the next 5-10 years, in my opinion.
Now, if you are going solely for peace of mind, do the MPACT.
But, to me, advisor made a very convincing argument. It’s easy to get a scholarship to stay in state and pay for much of college. This is a very true statement. You can use the MPACT for living expenses while at college. But, if you are going out of state, MPACT is not nearly as valuable. You’re better off growing it...
MPACT used to be awesome. Then, Lynn Fitch realized it was a time bomb and made it not awesome.
Also, if your kids go to private school now, remember to use the 529 as a pass-through tax write off. 10k per kid.
You have a greater return and more flexibility. Tuition increases are going to flatten out in the next 5-10 years, in my opinion.
Now, if you are going solely for peace of mind, do the MPACT.
But, to me, advisor made a very convincing argument. It’s easy to get a scholarship to stay in state and pay for much of college. This is a very true statement. You can use the MPACT for living expenses while at college. But, if you are going out of state, MPACT is not nearly as valuable. You’re better off growing it...
MPACT used to be awesome. Then, Lynn Fitch realized it was a time bomb and made it not awesome.
Also, if your kids go to private school now, remember to use the 529 as a pass-through tax write off. 10k per kid.
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Yeah, I got my oldest kid on the original plan. Second kid is on the revised plan - it’s about twice as expensive.
I went with the 2 year mpact plan on both my kids. Figured that was better than going all in with the 4 year plan in case they do end up getting really good scholarships or go out of state — I wouldn’t have invested a ridiculous amount of money that didn’t grow.
I went with the 2 year mpact plan on both my kids. Figured that was better than going all in with the 4 year plan in case they do end up getting really good scholarships or go out of state — I wouldn’t have invested a ridiculous amount of money that didn’t grow.
We went the 529 route and used the NY 529. Not limited to the state you live in or where your kids go to school. Live in Ga and we also benefited from the lottery funded scholarship. 529 can be used for all college related expenses not just tuition.
I have 529s for my kids. I like that it can be used for more than tuition and can be passed along to basically anybody in my family if my kids get full rides or choose not to go to college.
I needed flexibility on the contribution because my wife and I are still paying off our school(almost done). MPACT is a set price and I thought it was high for 1 year of college. I was supposed to pay like $130 a month for 18 years. Maybe inflation will get us there, but I didn't see it as being that good of a deal. 529 should have better return over the long run. Minimum contribution for a Mississippi plan is $25 so you can start small and to it when you get more cash flow.
If you go 529, look at other States. Some plans have lower costs than Mississippi does, but the startup and contributions are different.
I needed flexibility on the contribution because my wife and I are still paying off our school(almost done). MPACT is a set price and I thought it was high for 1 year of college. I was supposed to pay like $130 a month for 18 years. Maybe inflation will get us there, but I didn't see it as being that good of a deal. 529 should have better return over the long run. Minimum contribution for a Mississippi plan is $25 so you can start small and to it when you get more cash flow.
If you go 529, look at other States. Some plans have lower costs than Mississippi does, but the startup and contributions are different.
My daughter is starting her 4th year at State next month. She will graduate in May. In 2002, we signed an MPACT contract for a 5 year plan at a 4 year college (knowing she would go to MSU). It was no brainer. The total cost was around $15,000 and we paid it monthly for 5 years. Her actual tuition costs will end up in the neighborhood of $35,000, so yeah, it's been great. In September 2008, I cashed it two really ****** whole life policies that had ~$12,000 in value and told my by buddy at Trustmark that's a money manager for them to invest it in mutual funds with the goal to pay for "other" expenses at college. Over the next few months, it lost down to about $8,000. We fed it each month with $200 on a bank draft. When she entered college in 2016, it had ~$42,000 in it. She lived in the dorm her first two years and apartments starting last Fall. I've paid sorority dues, apartment expenses, dorm costs, food plan costs, etc... with this money. If nothing changes, she'll have around $25,000 in that account when she graduates. It is now in her name since she's 21. I told her I would continue to put $200/month in it until she was 30 and hopefully she could go without touching it and add to it as she gets older with an eye toward it being a substantial amount of money by the time she's 50 (hoping she can accomplish that). My money manager has done a great job...I take no credit whatsoever for it. We've paid for incidentals along the way out of our bank account and have only used the mutual fund account for large expenses. MPACT did what was expected and I thought it was a great investment...we will have some money left over at the end and it will be returned. We got lucky with a good stock market run at the right time with the mutual funds too. All in all, she'll graduate in 4 years with a double major of marketing and finance, will not owe a dime to anyone and have $20,000-25,000 in her mutual fund account. I feel very fortunate...I know she does.
Thanks for the advice everybody I will definitely be going with the 529. Can I just have one for both kids or should I have two seperate accounts?
I am assuming 2002 was before they changed the formula, because that is stupid cheap. $15,000 for all 4 years!!
For me, it all comes down to whether you value peace of mind or potential earnings more. It is quite possible that a 529 will end up having more value than an Mpact contract, and as many have already pointed out, there is more flexibility in terms of investment options and qualified expenses with a 529.
That said, an Mpact contract guarantees that tuition will be covered(at the MS public university rate), and there is no one on this message board that knows what’s going to happen there over the next 20 years. If it triples again, Mpact will be an absolute bargain. Plus, regardless of the beneficiary, there are option to use portions of it for other children if your son or daughter ends up getting scholarship money.
With multiple children, one option would be to hedge your bets and to get an Mpact contract for one while opening a 529 for the other(s). The key is obviously to start saving one way or another. The only guarantee is that an already significant cost will continue to increase
That said, an Mpact contract guarantees that tuition will be covered(at the MS public university rate), and there is no one on this message board that knows what’s going to happen there over the next 20 years. If it triples again, Mpact will be an absolute bargain. Plus, regardless of the beneficiary, there are option to use portions of it for other children if your son or daughter ends up getting scholarship money.
With multiple children, one option would be to hedge your bets and to get an Mpact contract for one while opening a 529 for the other(s). The key is obviously to start saving one way or another. The only guarantee is that an already significant cost will continue to increase
I went back and checked to make sure after you asked. It was actually $16,500...sorry for the confusion...and that's for 160 hours or 5 years at a 4 year college.
You can diversify between mpact and macs. We did 2 years in mpact and will do the rest through macs. So we have some locked in and some tied to the market. Also the macs money you can use for more than just tuition and fees while mpact doesn’t have that flexibility.
As a former admissions staffer at State, I'd recommend always keeping track of what the Office of Admissions and Scholarships does with MPACT or similar programs, particularly if you move out of state.
It must be separate. However, you can transfer between kids or to a grandkid if one kid doesn't go to college.
It must be the Mississippi 529 and is only a write-off on MS income tax. No contribution to a 529 is deductible federally.
I am out of state now and both of my daughter have MPACT fully funded. What do you mean by this statement? What would they do? Thanks
I left the office several years ago, so I can’t say what they’ll do now. The question is how they’ll honor the MPACT funds in the mix of standard Tuition and Fees and the out of state portion. I’d recommend giving the office a call and asking just to make sure you’re informed. It should be real quick call - we got those questions all the time and didn't mind one bit. Just tell them you have MPACT but live out of state and ask how that works for your kids AND HOW IT AFFECTS SCHOLARSHIPS. I seem to remember that you’d be allowed to pocket the excess scholarship money your kid earns, but again, that may have changed.
Thanks. So you are talking about if my kids go to a Mississippi school with MPACT funds since we live out of state now.
Do one per kid that way you can contribute a little more for the favorite child*