Any 529 fund that has option trading possibility?

Discussion in 'Risk Management' started by ggelitetrader000, May 4, 2019.

  1. I have put about 30k for my daughter in fidelity 529 but investment choice sucks. There are aggressive, age based and conservative that allows only 2 modification of investment per year and have to submit form. That is soooo 1930. I looked at ameritrade 529 plan and it is similar. Are all 529 plan like that? Plus the fund has expense ratio of 0.99% that is very high.

    I am looking to see if there is any 529 available where i can preferably to options and if not stock and etf trading. Thanks.,
  2. Robert Morse

    Robert Morse Sponsor

    I think these are state regulated plans.
    MoreLeverage and fan27 like this.
  3. You may want to look into ESAs, lower limits but these education savings accounts can be traded at many retail brokers in the normal way. With 529s, not only are the investment options limited to mutual funds, many prevent you from changing your investments more than once a year!
  4. thanks I will look into that. I also found fidelity offers what is called UGMA/UTMA.
  5. Those are taxable custodial accounts for minors, and can be invested and traded. I’m not sure about getting options permissions, but you can ask various retail brokers what they allow for those accounts. Most offer them.
  6. I see thanks, although the coverdell appears to have only 2000$ per year contribution, I am thinking about doing that. If i transfer from 529 to coverdell, is it considered roll-over and tax-free? Thanks.,
  7. You can go ESA->529 taxfree as long as you double check the rules on beneficiaries, but not v versa. The low ESA limit is a drag, and you can’t easily avoid it by using a 529 because of the lack of transfer that way. You can do a mix I guess, if you’ve got extra cash to invest thst won’t eventually go into the ESA.
    Last edited: May 7, 2019
    ggelitetrader000 likes this.
  8. ironchef


    I think most custodial do not allow options except covered calls and cash secured puts.
  9. manonfire


    UTMA/UGMA funds must be used for the child's benefit once they are deposited and ownership reverts to the minor at the age of majority in their state. If there is any acrimony in the family and knowledge of these funds expect trouble, ex wife, kids etc when they turn 18. This is a gift that cannot be undone.
  10. regarding acromony, knock knock knoc... hopefully never happens. But I would like to administer and grow before turning 18. And possible partial withdrawal... hopefully last one never have to happen.
    #10     May 8, 2019