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We have two 529 accounts for LO; the first is through our home state because they gift $500 to every baby born in the state if you open a 529 here . You can open a 529 using any state's system/plan and some are better than others. My MIL and DH opened the second, through her investment guy and I can't remember what state he selected, but it's not a state either of us live in; it's just a state with a better plan than other states. Both were extremely easy to set up, and I know there is good info online comparing state plans.

I thought this article was really helpful. We have an ESA, and we found our investment person using Dave Ramsey's ELP referral program (which basically just means they are local people who have been endorsed by him because they follow his principles when giving advice).

http://theartofsimple.net/529s-and-esas-%E2%80%94-the-nitty-gritty-of-saving-for-college/

I just read that a Roth IRA can be used for college expenses. Anyone look into that instead of a 529

I did a lot of research and we ended up going with UESP (Utah Educational Savings Plan). There weren't any tax advantages to opening one in my home state. There is no monthly minimum contribution and the fees are really low.

ETA: Here's a good article: http://m.huffpost.com/us/entry/5699191

We did the Vanguard one (Nevada). There was no tax benefit to going with our state's plan. We got caught up doing research on the other states' plans but eventually we just bit the bullet and chose one based on some recommendations online and also the fact that I already have a Vanguard IRA. We also opened a mutual fund separately so we are not putting everything in the 529.

@Mrs. Chipmunk: we signed up for the GET program. We choose to pay an initial lump sum and are now contributing a small monthly amount that feels do-able and not too overwhelming. It was easy to sign up and has been a smooth process so far.

@AmandaB8: no the way i understood it was that the only other way to withdraw money from the Roth before 59 1/2 without the 10% penalty would be if it was for education expenses.

@T.H.O.U.: @AmandaB8: T.H.O.U is correct. There are other ways to avoid the penalty (first time home purchase, medical expenses, etc), but education is one.

There are income limitations to contributing to a Roth IRA as well as you are capped at $5,500 per year. The 529 does not have these limitations or caps. There are pros and cons to both. I usually lean towards 529's for my clients, but that is only because I'd like them to be taking advantage of both if financially feasible (fully funding a Roth IRA for their personal retirement and then putting away money in a 529 for their child's education).

I would investigate your state's 529 and see if there are any tax benefits to investing with it. I would recommend vetting the 529, though, as the tax benefits are usually not huge monetarily and having a well performing plan (and one that has a good reputation) is of the utmost importance.

We went with UESP in Utah since the one's offered in California doesn't give us any additional tax breaks. Plus everything @lawbee11: stated!

@T.H.O.U.: my cpa told us to squirrel money away into our IRA instead of a 529 since it's more important for us to have a retirement account for our future. We were told we can withdraw penalty free for higher education, so that's what we're doing.

I also have a Coverdell ESA account which maxes out at $2000 contribution per year BUT the good part is anyone can contribute to it so my parents contribute to it instead of christmas gifts. You can only contribute till they're 18 but you can also use it for k-12 or college expenses. Which is nice.