Best Plan for Kid's College Funds | Page 3 | TigerDroppings.com
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Janky
LSU Fan
Team Primo
Member since Jun 2011
9981 posts

re: Best Plan for Kid's College Funds

quote:

So say the child gets a full ride or TOPS is still around (I doubt this) and their is more then what is needed in the fund. Is it just withdrawn with a penalty/tax, or is their anything else that can be done with it?


I can be transferred to another relative.


StinkBait72
USA Fan
Member since Nov 2011
1072 posts

re: Best Plan for Kid's College Funds
Found this:

All other requests for refund will result in the
termination of the account and in the refund of:
a. the deposits invested in fixed earnings, if the
account has been open for less than twelve months;
b. the redemption value, if the account has been
open for 12 or more months;
c. the deposits to or the current value of an account
invested in a variable earnings option, whichever is less, less
earning enhancements allocated to the account and earnings
thereon if the account has been open for less than 12 months.
Any increase in the value of an account invested in a
variable earnings option over the amount deposited shall be
13 Louisiana Administrative Code March 2013
forfeited by the account owner and deposited in the Variable
Earnings Transaction Fund, if the account was invested in a
variable earnings option and terminated within 12 months of
the date the account was opened;
d. the current value (less earning enhancements
allocated to the account and earnings thereon) of an account
invested in variable earnings, if the account has been open
for 12 or more months.

So it can be refunded but the "enhancements" must be payed back it appears as long as it is opened for >12 months.
This post was edited on 10/7 at 4:06 pm


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rmc
LSU Fan
Zachary, LA
Member since Sep 2004
22715 posts

re: Best Plan for Kid's College Funds
quote:

Don't let fund fees be the determining factor in any investment.


They aren't the "determining" factor, but I do take them into account. I need to look at the match for my bracket and also what my state income rate is versus variety of investment choices.


Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57959 posts

re: Best Plan for Kid's College Funds
quote:

They aren't the "determining" factor, but I do take them into account. I need to look at the match for my bracket and also what my state income rate is versus variety of investment choices.


I could never manage money for you.


Janky
LSU Fan
Team Primo
Member since Jun 2011
9981 posts

re: Best Plan for Kid's College Funds
What is the determining factor if I may ask?


rmc
LSU Fan
Zachary, LA
Member since Sep 2004
22715 posts

re: Best Plan for Kid's College Funds
quote:

What is the determining factor if I may ask?


I can't point to any one factor. I can tell you what I'd like out of an investment vehicle for my child's education:
1. Something that isn't restricted to education. My son is way smarter than me, but there is always the chance he doesn't obtain education past high school. I don't want to lose 10% based on that. I'm not going back to school. I can't use it for anything else w/o a penalty.
2. Something with more investment options.

I'm not an expert on investing by any means. I'm humbled everyday that I read this board. I try to find out as much as I can about each fund, etf, or individual stock I put my money in. 5%+ front loaded fee certainly doesn't look as good as no load ETFs. Of course, you get what you pay for.


rmc
LSU Fan
Zachary, LA
Member since Sep 2004
22715 posts

re: Best Plan for Kid's College Funds
quote:

I could never manage money for you.


Not even for a fellow zacharyite?


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Janky
LSU Fan
Team Primo
Member since Jun 2011
9981 posts

re: Best Plan for Kid's College Funds
I agree with you that loaded funds are the devil. However, expense ratios are not worth arguing over.

You can always setup an UGMA/UTMA but you will lose control at age of majority. However, no penalties from the IRS are involved.


Breadcrumbs
LSU Fan
Baton Rouge
Member since May 2005
2880 posts

re: Best Plan for Kid's College Funds
From what I can tell in the 529, if the kid gets a scholarship you get a form 1098 from the school for the price of tuition and fees and it lists the scholarship amount. Need to check with poodle or CPA but I think you can take a distribution for the cost of tuition and fees and room and board (but not computers?) without penalty from the 529 (eta: even though theres a scholarship) Any amounts leftover can be transferred to siblings or relatives even yourself for use for accredited higher education costs for 30 years. Then just the gains are taxed with 10% penalty (eta: is it just the gains or contributions plus gains coming out with 10% penalty, poodle?) . So there's a case for not overfunding these things if chance of no accredited higher education for anyone else.

Utma is subject to kiddie tax but can be used for secondary too but belongs to kid at the age of majority. I almost think keeping the money in our names in a designated account would be better.

Also can't $10,000 of the Roth or IRA be used toward higher education without penalty as well?
This post was edited on 10/7 at 9:40 pm


Janky
LSU Fan
Team Primo
Member since Jun 2011
9981 posts

re: Best Plan for Kid's College Funds
The other thing of UTMA/UGMA is because the assets are owned by the minor they are considered assets of the minor. This can hurt if you are applying for financial aid. I agree UTMA/UGMA is not very appealing.


DownshiftAndFloorIt
LSU Fan
The devil dreams on an idle horse
Member since Jan 2011
42219 posts

re: Best Plan for Kid's College Funds
I don't have a kid yet, but my plan is to just start a separate savings account and try to get them to pay for school themselves. If they can manage it give them what's in the account as a grad present. If they can't make enough money use it to help em out.


Breadcrumbs
LSU Fan
Baton Rouge
Member since May 2005
2880 posts

re: Best Plan for Kid's College Funds
Oops, good point about the financial aid qualification. Thanks


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Venelar
LSU Fan
The AP
Member since Oct 2010
398 posts

re: Best Plan for Kid's College Funds
That's what we did but we used our 2nd roth space for it. They'll know they need to help & if they get scholarships great. By then the house will be paid so hopefully we can cash flow most of it. If not we tap that 2nd Roth.


Breadcrumbs
LSU Fan
Baton Rouge
Member since May 2005
2880 posts

re: Best Plan for Kid's College Funds
quote:

but my plan is to just start a separate savings account and try to get them to pay for school themselves. If they can manage it give them what's in the account as a grad present.


Yeah, I definitely think that's to be weighed against the other options. I consider it all the time as it holds the most flexibility.


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Sigma
Michigan State Fan
Fairhope, AL
Member since Dec 2005
2312 posts

re: Best Plan for Kid's College Funds
quote:

That's what we did but we used our 2nd roth space for it. They'll know they need to help & if they get scholarships great. By then the house will be paid so hopefully we can cash flow most of it. If not we tap that 2nd Roth.


How are you saving for retirement?


Venelar
LSU Fan
The AP
Member since Oct 2010
398 posts

re: Best Plan for Kid's College Funds
Taking our company matches and maxing out my Roth space. Ideally in the other Roth we never have to use it for education (retirement > education)


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