Yeah, 529 plan. However, make sure you're saving for your own retirement first. If you qualify and don't have a Roth IRA, I'd fund that before funding a 529. It's more flexible and can be used later to fund education too, if needed.
Yeah, 529 plan. However, make sure you're saving for your own retirement first. If you qualify and don't have a Roth IRA, I'd fund that before funding a 529. It's more flexible and can be used later to fund education too, if needed.
I will definitely look into the 529 plan...I also need to set something for myself. I will be able to start a Roth IRA for myself and a 529 at the same time assuming the max per year on the Roth is $2000
Thank you for your help
I will definitely look into the 529 plan...I also need to set something for myself. I will be able to start a Roth IRA for myself and a 529 at the same time assuming the max per year on the Roth is $2000
I am going to break away from some of the comments here.
Make sure you realize the terms and restrictions for all of these plans. For example a 529 plan is useable only for qualifying educational expenses. There are also limited options for 529 plans and if you hire an investment advisor, they dont work for free.
UGMA accounts also have huge restrictions and downsides.
My suggestion is to create a joint account "earmarked" for the kiddo that YOU control and dont worry about paying taxes as you go, I would rather keep full control and pay taxes than be restricted or even LOSE the money if the kiddo does not go to school etc.
I am going to break away from some of the comments here.
Make sure you realize the terms and restrictions for all of these plans. For example a 529 plan is useable only for qualifying educational expenses. There are also limited options for 529 plans and if you hire an investment advisor, they dont work for free.
UGMA accounts also have huge restrictions and downsides.
My suggestion is to create a joint account "earmarked" for the kiddo that YOU control and dont worry about paying taxes as you go, I would rather keep full control and pay taxes than be restricted or even LOSE the money if the kiddo does not go to school etc.
I am going to break away from some of the comments here.
Make sure you realize the terms and restrictions for all of these plans. For example a 529 plan is useable only for qualifying educational expenses. There are also limited options for 529 plans and if you hire an investment advisor, they dont work for free.
UGMA accounts also have huge restrictions and downsides.
My suggestion is to create a joint account "earmarked" for the kiddo that YOU control and dont worry about paying taxes as you go, I would rather keep full control and pay taxes than be restricted or even LOSE the money if the kiddo does not go to school etc.
wall, in that case then why not just set up a "separate" Roth IRA earmarked (assuming he and wife qualify and are not already fully $5K funding)? The principal can always be withdrawn tax and penalty free and I believe earnings can be w/d for child's education.
Assuming one is already going to save and is under the income limitation then I'm a big proponent of funding a Roth...no downside really, lots of upside.
Quote Originally Posted by wallstreetcappers:
I am going to break away from some of the comments here.
Make sure you realize the terms and restrictions for all of these plans. For example a 529 plan is useable only for qualifying educational expenses. There are also limited options for 529 plans and if you hire an investment advisor, they dont work for free.
UGMA accounts also have huge restrictions and downsides.
My suggestion is to create a joint account "earmarked" for the kiddo that YOU control and dont worry about paying taxes as you go, I would rather keep full control and pay taxes than be restricted or even LOSE the money if the kiddo does not go to school etc.
wall, in that case then why not just set up a "separate" Roth IRA earmarked (assuming he and wife qualify and are not already fully $5K funding)? The principal can always be withdrawn tax and penalty free and I believe earnings can be w/d for child's education.
Assuming one is already going to save and is under the income limitation then I'm a big proponent of funding a Roth...no downside really, lots of upside.
Me and the mom are not married and I have nothing what-so-ever for my future as of now. I am 34.
I can bear down and save alot...(more than 20k) if I bear down.. I love the idea of the Roth IRA..Now assuming its a 5K max per year perhaps I can open one for myself and him and fund both. I can do that without altering my life. Im not sure ill be able to do that in 5 years form now but I can in 2010. What that be enough? I will also consider a 529 for a smaller amount since it can be used for education. I will have to calculate what $25 per month will give me or $50, etc.
Thank you for all your feedback. Just trying to get my ducks in a row here
Me and the mom are not married and I have nothing what-so-ever for my future as of now. I am 34.
I can bear down and save alot...(more than 20k) if I bear down.. I love the idea of the Roth IRA..Now assuming its a 5K max per year perhaps I can open one for myself and him and fund both. I can do that without altering my life. Im not sure ill be able to do that in 5 years form now but I can in 2010. What that be enough? I will also consider a 529 for a smaller amount since it can be used for education. I will have to calculate what $25 per month will give me or $50, etc.
Thank you for all your feedback. Just trying to get my ducks in a row here
Ok If I start this year 2009 and contribute 5K every year till i'm 60 at 8% interest (which I believe is fair) I will have approx $431,000
My total investment would be $130,000 Geez why didnt I do this sooner
I will assume my son will not need 5k per year just because he will have so much more time..maybe i can spread out 5K per year for him instead of putting all my eggs in one basket.
Thoughts?
Ok If I start this year 2009 and contribute 5K every year till i'm 60 at 8% interest (which I believe is fair) I will have approx $431,000
My total investment would be $130,000 Geez why didnt I do this sooner
I will assume my son will not need 5k per year just because he will have so much more time..maybe i can spread out 5K per year for him instead of putting all my eggs in one basket.
dont put your kids name on the account...he/she will never qualify for financial aid or anything cause he/she will have to much money...keep it in your name and use it for your kid when the time comes...
dont put your kids name on the account...he/she will never qualify for financial aid or anything cause he/she will have to much money...keep it in your name and use it for your kid when the time comes...
When you invents, lets say 40k over 18 years & your daughter (cuz you are having a girl) decides not to go to college you LOSE every fuckin cent.
Its only good in the state you actually live. You live in NY, and your girl wants to party at West Virginia.. that's right, its worthless. She'll have to go to NYU, St Johns, etc...
congrats, but 529 is foolish.
1st things 1st.
When you invents, lets say 40k over 18 years & your daughter (cuz you are having a girl) decides not to go to college you LOSE every fuckin cent.
Its only good in the state you actually live. You live in NY, and your girl wants to party at West Virginia.. that's right, its worthless. She'll have to go to NYU, St Johns, etc...
When you invents, lets say 40k over 18 years & your daughter (cuz you are having a girl) decides not to go to college you LOSE every fuckin cent.
Its only good in the state you actually live. You live in NY, and your girl wants to party at West Virginia.. that's right, its worthless. She'll have to go to NYU, St Johns, etc...
Not saying 529 is the way to go, but almost everything you said there is false.
1. You don't lose the account if your beneficiary does not go to college. If nonqualified withdrawals are made they would be subject to a 10% penalty on the earnings (plus tax on the earnings). That is it. Or, the owner can change beneficiaries to a qualified relative to withdrawal for qualified expenses.
2. Every state has a 529 plan. None require that you go to college in that state. Totally false. Not only that but regardless of where you live you can invest in any state's 529 plan.
www.savingforcollege.com is a great resource.
Quote Originally Posted by YaMon:
congrats, but 529 is foolish.
1st things 1st.
When you invents, lets say 40k over 18 years & your daughter (cuz you are having a girl) decides not to go to college you LOSE every fuckin cent.
Its only good in the state you actually live. You live in NY, and your girl wants to party at West Virginia.. that's right, its worthless. She'll have to go to NYU, St Johns, etc...
Not saying 529 is the way to go, but almost everything you said there is false.
1. You don't lose the account if your beneficiary does not go to college. If nonqualified withdrawals are made they would be subject to a 10% penalty on the earnings (plus tax on the earnings). That is it. Or, the owner can change beneficiaries to a qualified relative to withdrawal for qualified expenses.
2. Every state has a 529 plan. None require that you go to college in that state. Totally false. Not only that but regardless of where you live you can invest in any state's 529 plan.
When you invents, lets say 40k over 18 years & your daughter (cuz you are having a girl) decides not to go to college you LOSE every fuckin cent.
Its only good in the state you actually live. You live in NY, and your girl wants to party at West Virginia.. that's right, its worthless. She'll have to go to NYU, St Johns, etc...
Ummm, that is so wrong it is hilarious. If your kid doesn't end up going to college you DO NOT lose every cent. Terrible.
Quote Originally Posted by YaMon:
congrats, but 529 is foolish.
1st things 1st.
When you invents, lets say 40k over 18 years & your daughter (cuz you are having a girl) decides not to go to college you LOSE every fuckin cent.
Its only good in the state you actually live. You live in NY, and your girl wants to party at West Virginia.. that's right, its worthless. She'll have to go to NYU, St Johns, etc...
Ummm, that is so wrong it is hilarious. If your kid doesn't end up going to college you DO NOT lose every cent. Terrible.
Dump it in mo people will always smoke and drink no matter what the economy does a sure bet on days and on bad days and on mad days people drink and smoke for every reason you think of and dont care what the price of it is. Me and my neighbor are storing up bottles of whiskey and when the economy collapses were going have people plant are garden and mow are lawn with scissors to get a drink
Dump it in mo people will always smoke and drink no matter what the economy does a sure bet on days and on bad days and on mad days people drink and smoke for every reason you think of and dont care what the price of it is. Me and my neighbor are storing up bottles of whiskey and when the economy collapses were going have people plant are garden and mow are lawn with scissors to get a drink
Congrats on the 1st Child, I'm not ready for 1 myself. My only advice is to be very careful with gambling when your trying to raise a family 
days and on 
bad days and on 
mad days people drink and smoke for every reason you think of and dont care what the price of it is. Me and my neighbor are storing up bottles of whiskey and when the economy collapses were going have people plant are garden and mow are lawn with scissors to get a drink 
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