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Best Options for Childs Saving Plan
Posted on 10/13/15 at 10:23 am
Posted on 10/13/15 at 10:23 am
The wife and I will be having our first child around May of next year, I want to go ahead and set up some a college/savings plan for them. Even if it's only $20/wk, over time this will add up if I start saving now. I live in Louisiana and I know the 529 plans change form state to state, so is this my best option? TIA
4
Posted on 10/13/15 at 10:27 am to TigerSaint1
Posted on 10/13/15 at 10:29 am to TigerSaint1
I like Custodial accounts, but 529s are fine.
With custodial accounts, you can more actively manage everything, and you can use the proceeds for anything - car, wedding, gift for down payment on house, etc. If your child grows up and gets a good scholarship, a 529 will be very limited.
With custodial accounts, you can more actively manage everything, and you can use the proceeds for anything - car, wedding, gift for down payment on house, etc. If your child grows up and gets a good scholarship, a 529 will be very limited.
Posted on 10/13/15 at 10:58 am to anc
Any more info on custodial accounts? Tax benefits, matching....any good place to read up on them?
Posted on 10/13/15 at 11:12 am to TigerSaint1
Here's a good place to start.
LINK
Its not for everyone. A 529 is certainly simpler.
LINK
Its not for everyone. A 529 is certainly simpler.
This post was edited on 10/13/15 at 11:14 am
Posted on 10/13/15 at 2:19 pm to TigerSaint1
Looks like the state of Louisiana offers a state tax deduction. That's tough to beat when saving for college. LINK
If your child gets a scholarship, the federal penalty tax (10% I think) is waived on the amount of the scholarship. Your child would still pay income taxes on the withdrawal if it isn't for qualified educational expenses.
If you child doesn't go to college, they'd pay the 10% penalty plus income tax on withdrawals.
If your child gets a scholarship, the federal penalty tax (10% I think) is waived on the amount of the scholarship. Your child would still pay income taxes on the withdrawal if it isn't for qualified educational expenses.
If you child doesn't go to college, they'd pay the 10% penalty plus income tax on withdrawals.
Posted on 10/13/15 at 2:25 pm to gamemc
Louisiana also has a matching contribution if you qualify under income limits
It can be used for living expenses, grad school, siblings, etc
It can be used for living expenses, grad school, siblings, etc
Posted on 10/14/15 at 8:31 am to TigerSaint1
Max your retirement savings first. Your kid may get a scholarship or not want to go to college. You will need some money for you later.
401K, IRA, etc.
IF you have some money leftover for kids college, 529 or Coverdell IRA are both good options.
401K, IRA, etc.
IF you have some money leftover for kids college, 529 or Coverdell IRA are both good options.
Posted on 10/20/15 at 7:07 am to makersmark1
Lots of good advice. I personally use the Coverdale. At best I think it might cover year 1.
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