Related Posts
Me too, kid
Anonymous User
Conversation Starter
More Posts
Conversation Starter
Conversation Starter
Going in-house full-time āš»
Conversation Starter
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
I just opened 529s through our state plan which comes with a state tax refund. Iād make the chiice based on the tax advantages and the quality and flexibility of your stateās plan.
Is 529 only for college or high school as well..? Would love to open one if it can be used for private school education
@SC1 New tax law allows for 529 plans to be used for primary and secondary education (including private schools).
^Amazing
529 plan is generally a better option. If your kid gets scholarships, you can get a refund without penalty. You only pay a penalty if save too much, or your kid doesnāt go to school and you canāt change beneficiary to someone else (like another kid).
Did the 529 plan and now as my kids are reaching college age I regret it. The investment options in the 529 are far too conservative and as I look at the lifetime of the funds they saw 4% growth vs 12% for my own Roth IRA. Were I to do it over again, I would invest in the Roth for the kids, knowing full well that by the time they went to college I could absorb the risk.
Thx all for the insights. Probably gonna start with 529. @P1, how did you deal with the income limits regarding Roth? (Assuming you cannot contribute anymore once your household income is like $200K, this significantly impact how much total $$ you can have in the account?)
You can back door a Roth. Put the money into a traditional ira and then convert immediately to a Roth.
And you can set up Roths for each kid, giving you even more you can put away.
P1, really? I did a quick search and it looks like the kid would have to have earned income. Unless Iām missing something I donāt see how a Roth IRA is a substitute for a 529
P1ā your state must have horrible investment options. I am probably 3-4x your 4% return in the last eight years. Granted, I intentionally increased the risk profile by taking aged based fund for about 60% and equity index funds for the other 40% becsuse I thought the index fund was too conservative.
IRA wouldn't be an option because the kids don't have earned income. I think you might mean a taxable investment account (normal brokerage type). This is what my wife and I are doing for our son.
Our ESPP is managed through Morgan Stanley which is where our investments are as well so I have them journal my shares to our retail account. I tend to split the buys with my Son's account. A share for you, a share for me. Then take monthly contributions.