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New child financial plans
Posted on 3/23/17 at 12:45 am
Posted on 3/23/17 at 12:45 am
Would like to start something for the new baby. Any information would be well appreciated. I've read a bit about IRA's, and the 529 plans. Even read about the Gerber plan, but don't know really what direction to go. I'm leaning more towards an overall savings or invested option vs tuition but again, not informed enough to make a decision. Anyone have any experience or advice I'm all ears.
5
Posted on 3/23/17 at 9:42 am to ELT
Not to scare you, but unless you're socking away a rather large sum, you probably won't be able to cover college in 18 years. For example, my son goes to Davidson College, which is currently $64,000 a year. 18 years ago, it was $21,395, an increase of 199% ($42.6k). This is private school, so they have a lot of grant based financial aid. We get $45k per year and have to foot the rest.
This is still less than our flagship state college (UNC), which runs around $25k. Assuming your kid goes to an elite private school and we use the same rate of increase, you're looking at $191.5k per year in 18 years. State school will run from $25k to right at $75k.
All that said, your best bet is making sure the kid balls out academically (3.8 GPA or better un-weighted), tons of APs and a crapload of extracurriculars to ensure you get merit and/or need based aid.
This is still less than our flagship state college (UNC), which runs around $25k. Assuming your kid goes to an elite private school and we use the same rate of increase, you're looking at $191.5k per year in 18 years. State school will run from $25k to right at $75k.
All that said, your best bet is making sure the kid balls out academically (3.8 GPA or better un-weighted), tons of APs and a crapload of extracurriculars to ensure you get merit and/or need based aid.
This post was edited on 3/23/17 at 10:27 am
Posted on 3/23/17 at 10:07 am to ELT
I do the LA Start Saving Plan. Deductible on state taxes and the state has a match based on income. My kids are still young but I'm happy with it so far. I think you can put 4800/year per kid if you're married.
Posted on 3/23/17 at 10:53 am to OysterPoBoy
quote:
OysterPoBoy
quote:
I do the LA Start Saving Plan. Deductible on state taxes and the state has a match based on income. My kids are still young but I'm happy with it so far. I think you can put 4800/year per kid if you're married.
You can contribute as much as you want. The state tax deduction is capped at $4800/yr for married. But additional exclusion can be carried over to the next year. (#10)
Technically there is a maximum but it would be hard to reach. 5 times the annual Qualified Higher Education expenses at highest cost Louisiana University (#51)
LINK
Posted on 3/23/17 at 11:28 am to ELT
I have an LA Start Plan and a UTMA investment account for my daughter. I am planning to do the same thing for any future children we have.
The state contributions to the start plan are really not that much if you make decent money. I guess 2% is better than nothing.
I'm attempting to find a way for her (at 13 months old) to work for my business so I can open a Roth for her.
Why my 3 yeard old has a Roth IRA and why yours should too
The state contributions to the start plan are really not that much if you make decent money. I guess 2% is better than nothing.
I'm attempting to find a way for her (at 13 months old) to work for my business so I can open a Roth for her.
Why my 3 yeard old has a Roth IRA and why yours should too
This post was edited on 3/23/17 at 11:31 am
Posted on 3/23/17 at 2:46 pm to Big Chipper
Believing that tuition increases can continue at current rates for 18 years is silly. What an extreme extrapolation.
If they charge $190k a year then they will give you $170k scholarships. It's similar to Gross Sales being a relatively meaningless number in CPG because Trade Spend on invoice and off invoice reduces that number dramatically to get to a Net Sales figure.
If they charge $190k a year then they will give you $170k scholarships. It's similar to Gross Sales being a relatively meaningless number in CPG because Trade Spend on invoice and off invoice reduces that number dramatically to get to a Net Sales figure.
This post was edited on 3/28/17 at 1:54 am
Posted on 3/23/17 at 3:09 pm to TigerRob20
quote:
Why my 3 yeard old has a Roth IRA and why yours should too
That's pretty elaborate. I think I'll just stick with a small savings account and work on the 529.
Posted on 3/24/17 at 2:40 pm to OysterPoBoy
quote:
I think I'll just stick with a small savings account and work on the 529.
Start building up that savings account then transfer that money into a money market account at your local bank. Then keep filling up that money market account and the 529.
Our daughter is 3.5 and we fund a 529 Alabama Plan and a money market account which is used for tuition.
Posted on 3/24/17 at 4:15 pm to ELT
my kid better wont be depending on me. He will learn to work and support himself. If he wants to go to college he better get good grades. If he wants a car he better have a job. Stop handing these kids money, thats what is wrong with the world today. A man doesnt know how to work for something. They want everything handed to them.
Posted on 3/25/17 at 10:27 pm to Big Chipper
I agree. College tuition rise at about 6-7% per year. You are better off putting money that can be used in a combined way for education and your retirement.
I also would encourage you to do it tax efficiently.
You can overfund a cash value insurance policy and utilize the funds for education and retirement purposes without giving up opportunity costs....
Or you can try a Roth IRA for your kids. Just FYI
I also would encourage you to do it tax efficiently.
You can overfund a cash value insurance policy and utilize the funds for education and retirement purposes without giving up opportunity costs....
Or you can try a Roth IRA for your kids. Just FYI
Posted on 3/26/17 at 12:11 am to oleyeller
quote:
Stop handing these kids money, thats what is wrong with the world today. A man doesnt know how to work for something. They want everything handed to them.
Posted on 3/26/17 at 5:46 am to ELT
Save for your retirement.
Max your 401Ks, IRAs, etc.
If you max that and still have money left, then a 529 for your kid is icing on the cake.
College is expensive because it has turned into a resort with classes. The dorms use to be cinder block rooms with bunk beds. The food used to be bland.
Max your 401Ks, IRAs, etc.
If you max that and still have money left, then a 529 for your kid is icing on the cake.
College is expensive because it has turned into a resort with classes. The dorms use to be cinder block rooms with bunk beds. The food used to be bland.
Posted on 3/27/17 at 5:02 pm to makersmark1
An aside, I am the grandfather two granddaughters, two and six months. The oldest has more toys than her room can hold, and the youngest will be wearing new clothes that the oldest outgrew. The oldest is like my son. Toys, meh, running around barefoot outside/playgrounds/climbing trees/throwing things...etc.
Last year I convinced my wife to stop buying more crap that never gets used. I opened each of them an account with Southern Company
No brokerage fees, dividends reinvested, 4%-6% yearly average. I figure the tax bite when they are of age will be minimal and if they want to spend it on a truck or a wedding dress, they're not restricted.
Last year I convinced my wife to stop buying more crap that never gets used. I opened each of them an account with Southern Company
No brokerage fees, dividends reinvested, 4%-6% yearly average. I figure the tax bite when they are of age will be minimal and if they want to spend it on a truck or a wedding dress, they're not restricted.
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