My thought process on this is.... college can be subsidized several ways, scholarshiips, grants, loans, etc.
Any thoughts to this? would you do it more evenly? (she's 5 and I'm 30 if that helps).
Full Version: 529 or retirement plans?
I've been investing in an IRA and my DDs 529 in a 4:1 ratio, for example, $100 to IRA, $25 to 529.
My thought process on this is.... college can be subsidized several ways, scholarshiips, grants, loans, etc.
The only subsidation of retirement is social security. There is no subsidizing retirement.
Any thoughts to this? would you do it more evenly? (she's 5 and I'm 30 if that helps).
My thought process on this is.... college can be subsidized several ways, scholarshiips, grants, loans, etc.
Any thoughts to this? would you do it more evenly? (she's 5 and I'm 30 if that helps).
It depends on the plans. I am 25 and my son is 3. I was told that I should pay myself an hour a day into my retirement plan pre-tax. My job matches the first 4% so long as its with the 401k plan they have. For my son, I used my states plan...PA guarentteed Savings 529. One, because I have yet sat down and taken the time to fully understand stocks, so this is better, a pre-paid college plan that inflates iwth the tuition rates. I put about $100 in a month. 529 in PA are good because if they go to school in PA the funds are not eligible for grant determination. So this means the money wont count against him when he goes for financial aid. PLus all the tax breaks on both accounts are agreat incentive.
So if I were you I would sway $25 more to her account. Because even if she doesnt use it, you can transfer it to your IRA without penalties I believe.
So if I were you I would sway $25 more to her account. Because even if she doesnt use it, you can transfer it to your IRA without penalties I believe.
QUOTE(uptomyneck @ Mar 23 2007, 08:41 AM) 
It depends on the plans. I am 25 and my son is 3. I was told that I should pay myself an hour a day into my retirement plan pre-tax. My job matches the first 4% so long as its with the 401k plan they have. For my son, I used my states plan...PA guarentteed Savings 529. One, because I have yet sat down and taken the time to fully understand stocks, so this is better, a pre-paid college plan that inflates iwth the tuition rates. I put about $100 in a month. 529 in PA are good because if they go to school in PA the funds are not eligible for grant determination. So this means the money wont count against him when he goes for financial aid. PLus all the tax breaks on both accounts are agreat incentive.
So if I were you I would sway $25 more to her account. Because even if she doesnt use it, you can transfer it to your IRA without penalties I believe.
So if I were you I would sway $25 more to her account. Because even if she doesnt use it, you can transfer it to your IRA without penalties I believe.
really? I need to check into that. that is interesting about the PA529... I should check into KS and see the benefits if she decided to go to a state school. Personally, I'd like her to get out an explore one of the coasts and NOT go to school at KU or KSU, but she's only 5... we have plenty of time to argue about that!
In all seriousness, thanks for posting about your state's plan... I had no idea... I just use USAAs 529 plan because it's convenient... (bad excuse I know..)
No Problem.
But use the Moody's rating to see what your states plan rates as well as others. Soem plans let you go outta state, but you just wont get the state incentives. Also, see if you can sign your childs 529 with sage scholars. I think they will help you out some too.
But use the Moody's rating to see what your states plan rates as well as others. Soem plans let you go outta state, but you just wont get the state incentives. Also, see if you can sign your childs 529 with sage scholars. I think they will help you out some too.
QUOTE
So if I were you I would sway $25 more to her account. Because even if she doesnt use it, you can transfer it to your IRA without penalties I believe.
I don't think so.
Qualified Tuition Programs
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Rollovers and Other Transfers
Assets can be rolled over or transferred from one QTP to another. In addition, the designated beneficiary can be changed without transferring accounts.
Rollovers
Any amount distributed from a QTP is not taxable if it is rolled over to another QTP for the benefit of the same beneficiary or for the benefit of a member of the beneficiary's family (including the beneficiary's spouse). An amount is rolled over if it is paid to another QTP within 60 days after the date of the distribution.
Assets can be rolled over or transferred from one QTP to another. In addition, the designated beneficiary can be changed without transferring accounts.
Rollovers
Any amount distributed from a QTP is not taxable if it is rolled over to another QTP for the benefit of the same beneficiary or for the benefit of a member of the beneficiary's family (including the beneficiary's spouse). An amount is rolled over if it is paid to another QTP within 60 days after the date of the distribution.
Max out Roth IRA's for you and spouse before puting a dime in a tuition plan. You can always withdraw what you put in tax and penalty free at any time.
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