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March 16, 2010


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We have a little one on the way, so we are considering a 529 plan. Can you setup one 529 plan and distribute the funds to all of your children in case one needs it and the other does not (because of scholarship, work, or a desire to not attend college)?


Yes, the beneficiary of a 529 Plan can be changed at any time by the owner.

Bibledebt, My Utah 529 plan allows transfers between children.

These seem like fairly straightforward rules. I read the Amazon review of this book had this to say:

"We'll address topics including: -How to write your own Personal Money Story -How to spend $1 million at Starbucks -What dogs can teach us about investing and taxes -Why you should ditch your retirement plan. The Great Recession has left all of us at a Financial Crossroads. Which path will you take?"

From that I assumed the book to be a bunch of pep talks. Seems a little more down to earth from the summaries that FMF has been posting.

Quite honestly, if the U.S. tax code gets any more complex, i think it'll cause a riot!

Could you educate us on HSA account - perhaps write an article about how one should go about finding and investing in HSA.

Thanks for all the education over time. I am a big fan of your site.


Note that Health Savings Accounts are only allowed for those enrolled in a high deductible health plan. The minimum annual deductible for a single person must be $1,150 and the minimum deductible for family coverage must be $2300. Note that this is the deductible, not annual premiums. All the HSA rules are covered in IRS publication 969. Search for "pub 969".

Pramod --

Here are some posts that might shed more light on an HSA:

If you're single with no dependents, but not necessarily young, an HSA with a high deductible plan is the way to go. DuPont recently changed its self-insured health care plan to provide 90% of out of pocket coverage with a $1000 deductible, up from 80% coverage. That makes it on par with the standard coverage limits of the standard health care plans. I'd much rather pay $500 more in annual deductible than 10% less of a million-dollar hospital bill for a major illness!

I also like the fact that I can get my eyes lasered and my own teeth straightened using HSA money, rather than just a minor dependent. Those are not covered under standard health, dental, and vision plans for most big corporations.

Great information...looking forward to the next chapter!

I sooo loved your explanation of Rule #2 (Roth IRA). That is exactly how I see it. It's great for everyone with tax-defferred retirement savings since it will allow you distribution diversification. Woot!


I think Rule #3 has so many caveats that it shouldn't be a rule.

And maybe the tale should wag the dog and I've never seen anything written about this.

Wouldn't it be prudent to manage your lifelong expenses to insure you stay in the 15% tax bracket? For example, If I borrow money to pay for a house now while I have children, I keep myself in the 15% tax bracket becuase of the deductions. Then refinance and take advantage of the deduction and any education tax breaks (if any at that time) to stay in 15% tax bracket. Then the day I retire is the day I pay off my mortgage and education loans. At which point I can pull up to $40 or $50k and stay within the 15% tax bracket correct? If I have a mortgage and/or other loans after retirement, I'll have to pull more money from 401k/IRA to pay off and maybe put me in the higher bracket. Right?

Maybe targeting the 15% tax bracket is a way to go. Never saw it addressed directly but paying 15% versus 35% would add up over a lifetime.

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