Comments on: Alternative to 529 plans (or how to save for college without tying up your money for 18 years)

By: Andrew

Andrew — Fri, 04 Jul 2008 01:43:25 +0000

I'd personally still try to put something in my 529 plan each month, even if you want to hold some out for private school. 529 Plan Guide

By: Stacey

Stacey — Thu, 26 Jun 2008 00:39:58 +0000

I believe 529 funds can also be used at some “foreign” universities. Ditto re: JoeTaxpayer suggesting spillover into 529s. No tax on earnings, a possible state tax deduction, protection from bankruptcy creditors, favorable finanical aid treatment, etc. All are good, no?!!!!

An added note re: the US Savins bonds–they must be owned/titled in the parent’s name, not be in the child’s name.

By: Cathy

Cathy — Sun, 22 Jun 2008 19:32:24 +0000

@TJ – Thanks for the correction!

@Thomas – I don’t think so, unfortunately! But check the Treasury site or consult an accountant to be sure.

By: thomas

thomas — Sat, 21 Jun 2008 19:06:49 +0000

does the Savings Bond program include paying back student loans? I have $1000 in bonds I would love to just dump out on my school loan.

By: TJ

TJ — Fri, 20 Jun 2008 21:38:27 +0000

Contributions from a Roth IRA can be withdrawn at anytime without penalty. There is no 5 year holding period requirement.

http://www.mymoneyblog.com/archives/2007/10/can-i-really-withdraw-my-roth-ira-contributions-at-any-time-without-tax-or-penalty.html

By: Credence

Credence — Fri, 20 Jun 2008 16:53:30 +0000

We are in an interesting situation with respect to college funds, because we are also trying to avoid a 529. We live in America, but my husband is a French citizen, and his entire close-knit family lives over there. Where a college education is FREE. We plan to move over there, basically for this reason, in 9 years, once my older son (from a previous marriage) graduates HS.

The dilemma is that our younger kids are American-born (though also French citizens) and bilingual/bicultural. So we are saving money in case they REALLY want to go to college here — and crossing our fingers that they will want to go over there!

Because of all this, we don’t want to use a 529, because if they go to school over there, we’ll be hit with nice big penalties when we withdraw the money. So what we are doing is just putting our contributions into a regular old investment account, with low-cost funds that won’t throw off a bunch of taxable dividends. And hopefully, in 15 years, the money will be ours and it will be a nice retirement supplement. : ) (Or money for the kids to start businesses, or down payments on houses, or something like that.)

By: Susan

Susan — Fri, 20 Jun 2008 13:31:59 +0000

Saving for your kids’ good. Very good post.

Unfortunatly, not everyone can save for their children education. But those who can and don’t should start by reading this article.

It’s so simple and it make a world of difference.

By: JoeTaxpayer

JoeTaxpayer — Fri, 20 Jun 2008 13:21:40 +0000

Well, this is tough. Assuming you are using the retirement accounts for something crazy already, retirement, perhaps, the IRAs get knocked out. A real shame that Coverdell (The College account formerly known as ‘Education IRA’) is so limited. You say chilren, more than one, you’ll need to save far more than the $2000 Coverdell allows. But if they go to private school, the chance they go to college is nearly 100%, no? So why not put some in the 529, after topping off the Coverdell?
Joe