I am looking into starting a savings plan for my son and for my daughter. In looking at the many plans, I can’t decide which one is best? Help!
– 529 for my state- which offers tax breaks
– 529 from better performing states but no tax break for me (like Utah)
– Prepaid college plan from an in state college – we are florida alumni but don’t live there any more.
– No plan for either and just kick back more into retirement
– No plan for either but start a brokerage account to save up for college
We opened Roth IRAs for our kids. We felt it was most important for our kids to have flexibility to use the money for something other than college, should they choose to go another route. My husband and I are custodians of the account, and we are able to make withdrawals for college purposes for our kids, all without tax penalty, just like a 529 would allow. However, if our kids choose another route post-high school other than college, they would be able to keep the money in the Roth/use it for other purposes. That’s just what our family chose to do!
We are doing the same and it has worked out for the best. Our daughter is military bound and will pursue education there out. The funds saved for her will set her up for good place when she is ready. Our soon will likely be an out of state student and will have an entirely different path. For children so totally opposite this savings type will continue to serve the family well.
I worked my way through college and paid for it myself with that and scholarships. I think a plain savings account is great but it won’t mature too much. Maybe bonds or cds? It might be worth checking different banks or credit unions
529 in state but when they apply to college, 20% will be computed toward their contribution towards their education. So those who don’t savw can qualify for financial aid. But of coyrse it all depends on your overall financial position.