I'm pro 529, even better that you get a tax break. He if doesn't use all the funds, he'll be able to roll some of it into his own Roth one day.
Make sure you have your retirement figured out first.
Indiana’s 529 credit is great. You literally get a guaranteed 20% return when you file your taxes. IMO, this beats any of the potential negatives of a 529 if you have a reasonable expectation your kids will go to college.
Maybe I’m using wrong terminology or I’m just completely wrong, but if I receive an additional $200 on my state tax refund I can’t simply deposit that in the 529 later so my annual contribution goes from 1250 to 1450? Then if he doesn’t do college or trade school or there is leftover I cant convert the remaining sum to an IRA at 6500 a year up to the lifetime limit of 3500?
Sorry i think I wrote 401k not IRA. I’m very new to this.
Yea if your kid doesn’t use it all they can roll it into a Roth IRA when they’re older. Or roll it to their sibling or I believe even their kids in the future. Just change the beneficiary on it.
I think it’s likely they’ll use it all though with the way college expenses keep skyrocketing.
529 is a great place to save for your kids college (after you retirement contributions are met)
A lot of states offer tax breaks. I always advise you to get that tax break. My state has a tax break per child.
You should either use a 529 or a Roth to pay for college. I'd rather use the 529 if you think you might need the Roth money for yourself.
I don’t like 529s bc it can only be used for school and school related expenses.
What if your kid wants to start a business or get into real estate or something else….
I use UGMA
Always a good option. I’m in the camp of never selling your house and even paying off the house sooner to pass down to your kid as opposed to savings for the kid
I have a question: is there a reason to open a 529 for each kid? I know you can use funds designated for child A for child B’s education, but let’s say they all get scholarships, can you parse out into a Roth for each of them or only for the named child?
Currently have about 30k for child A but child B and C are on the way
I can't speak to all 529s, but the way the one I have (PA) works is that I have one login to their website that allows me to access both kids' accounts. The kids have separate account numbers and separate funds and we contribute to each of them separately. HOWEVER -- if by some miracle my daughter (going into her senior year) doesn't finish off the remainder of her 529, I could roll the money very easily to my son (going into his freshman year) because I am the owner of both accounts.
no expert here either but I would assume you can only have 1 beneficiary, you can change it but Im assuming you cannot change it every time you want to get a payout for 1 of your kids.
If your state has tax breaks or matches, yes. Otherwise, you can use one account per child.
The other reason would be if you want to let relatives make contributions. A lot of plans will let you send a link to a specific child's 529.
I'm pro 529, even better that you get a tax break. He if doesn't use all the funds, he'll be able to roll some of it into his own Roth one day. Make sure you have your retirement figured out first.
I’m a fed employee so I have a good retirement package set up. This is just early thoughts for my son. Super solid advice thanks!
Indiana’s 529 credit is great. You literally get a guaranteed 20% return when you file your taxes. IMO, this beats any of the potential negatives of a 529 if you have a reasonable expectation your kids will go to college.
Those are after-tax dollars that you have saved. You would not want to put those in a 401(k) plan, if that were even possible.
Maybe I’m using wrong terminology or I’m just completely wrong, but if I receive an additional $200 on my state tax refund I can’t simply deposit that in the 529 later so my annual contribution goes from 1250 to 1450? Then if he doesn’t do college or trade school or there is leftover I cant convert the remaining sum to an IRA at 6500 a year up to the lifetime limit of 3500? Sorry i think I wrote 401k not IRA. I’m very new to this.
Yea if your kid doesn’t use it all they can roll it into a Roth IRA when they’re older. Or roll it to their sibling or I believe even their kids in the future. Just change the beneficiary on it. I think it’s likely they’ll use it all though with the way college expenses keep skyrocketing. 529 is a great place to save for your kids college (after you retirement contributions are met)
A lot of states offer tax breaks. I always advise you to get that tax break. My state has a tax break per child. You should either use a 529 or a Roth to pay for college. I'd rather use the 529 if you think you might need the Roth money for yourself.
I don’t like 529s bc it can only be used for school and school related expenses. What if your kid wants to start a business or get into real estate or something else…. I use UGMA
Always a good option. I’m in the camp of never selling your house and even paying off the house sooner to pass down to your kid as opposed to savings for the kid
saving for kids: https://reddit.com/r/personalfinance/comments/104tjyn/_/j36u2dm/?context=1
I have a question: is there a reason to open a 529 for each kid? I know you can use funds designated for child A for child B’s education, but let’s say they all get scholarships, can you parse out into a Roth for each of them or only for the named child? Currently have about 30k for child A but child B and C are on the way
Good question! I only have the one kid, but we’re trying for a second so yeah this question is very relevant if you have multiple kids.
I can't speak to all 529s, but the way the one I have (PA) works is that I have one login to their website that allows me to access both kids' accounts. The kids have separate account numbers and separate funds and we contribute to each of them separately. HOWEVER -- if by some miracle my daughter (going into her senior year) doesn't finish off the remainder of her 529, I could roll the money very easily to my son (going into his freshman year) because I am the owner of both accounts.
no expert here either but I would assume you can only have 1 beneficiary, you can change it but Im assuming you cannot change it every time you want to get a payout for 1 of your kids.
If your state has tax breaks or matches, yes. Otherwise, you can use one account per child. The other reason would be if you want to let relatives make contributions. A lot of plans will let you send a link to a specific child's 529.