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Best Method to Save for Childrens College?
Posted on 4/28/24 at 3:07 pm
Posted on 4/28/24 at 3:07 pm
Expecting our first child this year and trying to plan ahead.
Are 529 plans the best method due to the tax savings and high contribution limits? Any fine print with these funds that need to be considered?
Any other options out there that should be considered?
TIA
Are 529 plans the best method due to the tax savings and high contribution limits? Any fine print with these funds that need to be considered?
Any other options out there that should be considered?
TIA
9
Posted on 4/28/24 at 4:05 pm to rintintin
quote:
529 plans
This what we used for both kids. We put $200 per child in each month and have since they were born. Son is 14 and daughter is 12. We started early but we’re pretty much there with a few years to spare. All their tuition, books and most living expenses are currently covered.
Posted on 4/28/24 at 4:30 pm to rintintin
1. Max all retirement accounts
2. If you have enough money, 529 is a good idea.
I’ve got 529 Money leftover. They got scholarships.
I’ll give remainder to them as Roth over time.
2. If you have enough money, 529 is a good idea.
I’ve got 529 Money leftover. They got scholarships.
I’ll give remainder to them as Roth over time.
This post was edited on 4/28/24 at 4:33 pm
Posted on 4/28/24 at 7:10 pm to redneck hippie
quote:
We put $200 per child in each month and have since they were born.
That's what we would like to do. Good know it worked out well for you.
Posted on 4/28/24 at 8:28 pm to rintintin
I’m a fan of UTMA accounts; but, they do vary from one State to another.
Posted on 4/28/24 at 9:07 pm to wiltznucs
quote:
I’m a fan of UTMA accounts; but, they do vary from one State to another.
This is the route we went as well, because we didn’t want to be limited to only college savings since we know we’ll be doing private schooling (Louisiana) for PK-12. We talked about open 2 separate accounts, but ultimately just went w UTMA and hope we did right by them and don’t spend it all as soon as they turn 18
Posted on 4/28/24 at 9:32 pm to rintintin
Max all other accounts and then out 500/month into 529. We don’t get a state tax benefit but still next best investment account we can utilize.
Posted on 4/29/24 at 8:06 am to rintintin
I do $250 for the oldest, $175 for the middle and youngest each in 529 plans.
Also have a rental property if they choose to go to Arkansas.
I doubt it will be enough to cover 100% but should be close due to having a rental property already.
The first is 7-8 years out.
Have 24k saved for the oldest, 13k for the others.
It'll more than I had set up for me which was $0 given by parents. Hopeful they can obtain some scholarships to assist as well. U of A isn't terrible on cost, about 10k per year today for tuition. Assume by that time it'll be about 20-25k a year.
Also have a rental property if they choose to go to Arkansas.
I doubt it will be enough to cover 100% but should be close due to having a rental property already.
The first is 7-8 years out.
Have 24k saved for the oldest, 13k for the others.
It'll more than I had set up for me which was $0 given by parents. Hopeful they can obtain some scholarships to assist as well. U of A isn't terrible on cost, about 10k per year today for tuition. Assume by that time it'll be about 20-25k a year.
This post was edited on 4/29/24 at 8:06 am
Posted on 4/29/24 at 1:01 pm to Billy Blanks
If you have a lot of money in a traditional or rollover IRA, you might also consider a Roth conversion or a series of Roth conversions. If your conversion has been in your Roth for five years, you can get the conversion amount tax free without penalty. That's one reason why it is often better to max out your retirement accounts before you try to save for college.
Posted on 4/29/24 at 1:03 pm to rintintin
Start off small but be consistent. As your income grows throw a little more love their way. I started with $100 bucks a month, then a few years in $200/mo, then several times that monthly number this past year. First kid is 8 years out.
I attended a meeting with the President of my grad school and they said that tuition + room is $32K a year. It was around $15K in the early 2000's College costs keep rising so prepare for that.
Other advice is you cannot borrow for your retirement, so don't let that interfere with your retirement planning. Although my goal is to fund it 100%, if I fall short he will get a loan to fund the difference, but he will appreciate the help already given.
I attended a meeting with the President of my grad school and they said that tuition + room is $32K a year. It was around $15K in the early 2000's College costs keep rising so prepare for that.
Other advice is you cannot borrow for your retirement, so don't let that interfere with your retirement planning. Although my goal is to fund it 100%, if I fall short he will get a loan to fund the difference, but he will appreciate the help already given.
Posted on 4/29/24 at 1:55 pm to rintintin
Get the government to pay for it.
Posted on 4/29/24 at 3:36 pm to CharlesUFarley
quote:
If you have a lot of money in a traditional or rollover IRA, you might also consider a Roth conversion or a series of Roth conversions. If your conversion has been in your Roth for five years, you can get the conversion amount tax free without penalty. That's one reason why it is often better to max out your retirement accounts before you try to save for college.
This is great info, thanks.
Yeah I have a Roth as well as a couple of 401ks. Been slacking on my Roth though.
Posted on 4/30/24 at 6:26 am to CharlesUFarley
quote:
If you have a lot of money in a traditional or rollover IRA, you might also consider a Roth conversion or a series of Roth conversions. If your conversion has been in your Roth for five years, you can get the conversion amount tax free without penalty. That's one reason why it is often better to max out your retirement accounts before you try to save for college.
I converted an IRA to a roth a few years back and had to pay the tax on the conversion.
Have 3 ira's
A roth
Traditional
and SEP
Posted on 4/30/24 at 7:00 am to rintintin
Have relatives contribute to them as well. I ask for that when I get asked for birthday/Christmas present ideas. These kids have enough junk to play with in the house.
Posted on 4/30/24 at 1:00 pm to rintintin
Look into Columbia. If your kid is willing to become a Jihadist, they’ll give you a special rate.
Posted on 4/30/24 at 1:36 pm to MSTiger33
Absolutely, contributions when they are young enough actually has time to compound as well.
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