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.

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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.

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I could never manage money for you.

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What is the determining factor if I may ask?

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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.

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.

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?

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.

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.

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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.

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How are you saving for retirement?