Comments on Help a Reader: Saving for CollegeTypePad2009-09-25T12:33:05ZNAhttps://www.freemoneyfinance.com/tag:typepad.com,2003:https://www.freemoneyfinance.com/2009/10/help-a-reader-saving-for-college/comments/atom.xml/Roy commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a62c41bf970c2009-10-10T11:31:55Z2009-10-10T11:31:55ZRoyIf you haven't maxed your Roth IRA, I would do that first. It gives you flexibility because you can access...<p>If you haven't maxed your Roth IRA, I would do that first. It gives you flexibility because you can access what you contributed in an emergency or use it for your own retirement if it is not all needed for College.</p>Bad_Brad commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a629ecc1970c2009-10-09T17:42:20Z2009-10-09T17:42:20ZBad_BradCrystal - look into an ESA (Education Savings Account). The downside with an ESA is that you can only contribute...<p>Crystal - look into an ESA (Education Savings Account). The downside with an ESA is that you can only contribute $2000 per year, and you do have to spend the money on qualified education expenses or gift it to another family member before age 30 (there is no age limit on the 529). Like a 529, the money grows tax deferred and is tax free as long as it is spent on qualified education expenses, and like a 529, the assets are not considered your kid's assets, as long as the account is set up properly (generally with a parent as custodian for the benefit of the kid). Also, if you have a very high income, there are limits on the ESA, not on the 529.</p>
<p>But on the upside - you can invest the ESA assets in anything you want, whereas a 529 is limited to a bunch of state-run plans, some of which are pretty good but some of which are absolutely awful (some mutual fund run by the governor's kid or something similar). Also, with the ESA, if you ever enroll your kid in private school K through 12, you can use ESA money for that, which you can't do with the 529.</p>Crystal commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a5d32660970b2009-10-09T16:41:31Z2009-10-09T16:41:31ZCrystalThanks!<p>Thanks!</p>CPA Abroad commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a5d2f8c7970b2009-10-09T16:01:40Z2009-10-09T16:01:40ZCPA AbroadCrystal: You can make grandchildren, nieces, nephews or cousins beneficiaries as well. My wife and I do not have kids...<p>Crystal: You can make grandchildren, nieces, nephews or cousins beneficiaries as well. My wife and I do not have kids yet so I do not know all the ins and outs, but the rules on who you can use it for are somewhat lenient. <br />
</p>Crystal commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a6296fce970c2009-10-09T15:50:03Z2009-10-09T15:50:03ZCrystalMike, what happens when you run out of beneficiary college kids?<p>Mike, what happens when you run out of beneficiary college kids?</p>Crystal commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a5d2e88d970b2009-10-09T15:47:19Z2009-10-09T15:47:19ZCrystalAlso, what if the child gets a full ride or multiple scholarships that pay for everything? In our case, my...<p>Also, what if the child gets a full ride or multiple scholarships that pay for everything?</p>
<p>In our case, my in-laws had a general college fund for my husband. They ended up not using it since it crashed when he started (2001), but it was there for him as downpayment help for our home in 2007 (it covered 4/5 of our 20% downpayment). I think they took out a home equity loan instead for college expenses...it was some kind of loan that they paid off pretty quickly. Yes, my husband is a spoiled only child, but we are very and truly thankful to them.</p>
<p>I received a few scholarships that covered alot. I also worked part-time jobs all the way through to cover as much as I could. My parents covered my first year food and housing and $8000 in costs I couldn't cover over the last 3 years (about $13000-15000 total). I am also very thankful.</p>
<p>My little sister got even bigger scholarships for when she started this year, so my parents are putting in similar amounts for her overall (she doesn't have to work, which is good since she has to study more in Engineering...Business seemed a little easier). </p>
<p>Would my parents have been able to cash out the remainder in a 529? They didn't/don't have one for either of us, but I just thought it was an interesting question.</p>Mike Piper commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a629624c970c2009-10-09T15:38:13Z2009-10-09T15:38:13ZMike Piperhttp://www.obliviousinvestor.com/Crystal: You can change the beneficiary no problem. Pretty much as long as *somebody* you're related to ends up going...<p>Crystal: You can change the beneficiary no problem. Pretty much as long as *somebody* you're related to ends up going to college, it should work out fine.</p>Crystal commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a5d2d566970b2009-10-09T15:32:52Z2009-10-09T15:32:52ZCrystalWhat happens to a 529 if your child doesn't go to college? My in-laws started working right out of high...<p>What happens to a 529 if your child doesn't go to college? My in-laws started working right out of high school and a couple of my friends joined the military, what would have happened to their parents' 529 if they had one? Just a what-if question, not wishing anything on anyone. :)</p>Dan Ketcham commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a62957a4970c2009-10-09T15:30:27Z2009-10-09T15:30:27ZDan KetchamCongrats on the upcoming birth! You'll hear it over and over, but your life will never be the same, but,...<p>Congrats on the upcoming birth! You'll hear it over and over, but your life will never be the same, but, parenthood is the greatest!<br />
Similar to Matt above, I am just gonna be turning 30 and we have two, one just turned 4 and 1 soon to be 2 year old... Since their births we have been buying just plain old savings bonds for them as this is how my wife partially financed her own college, but recently we started 529s for them as well. With us living in Ohio, the OhioAdvantage fund is rated one of the best and thats whom we went with. Starting with an initial $25 and with some of the bonuses they have right now we are already up to $75 in one account and $100 in the other... also they have a deal going with an additional $25 for setting up automatic deposits. We went very conservative right now with the Vanguard funds as well. </p>
<p>Good luck! </p>
<p>* i can get you an additional $25 if you choose the OhioAdvantage fund, just contact me!</p>Matt Goche commented on 'Help a Reader: Saving for College'tag:typepad.com,2003:6a00d83451bcbd69e20120a6291a16970c2009-10-09T14:49:10Z2009-10-09T14:49:10ZMatt GocheCongrats on all your accomplishments. I am in a similar situation. I'm 30, married with 1 boy. Our modest house,...<p>Congrats on all your accomplishments. I am in a similar situation. I'm 30, married with 1 boy. Our modest house, cars, and everything else we own is paid for. Currently are contributing max gov't allows in 401k, Roths's etc... I suggest doing that first. In addition we opened up a Iowa 529 when our son was born and starting funding $25 a check(automatic). Nice Vangaurd funds to chose from so we put our money in bond funds mostly and a target date fund. My thinking is that he can use whatever ends up in his 529 - and then we'll help with the rest via savings and retirements(most likely Roth) - if he needs it.</p>