Do any of you guys have any experience with a 529 plan? What are the pros and cons or is it even worth it to go in this direction? It seems like the only pro is that it's pretax but are there stipulations that might not make it a good choice?
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I have a 529 for my daughter and I think it is a very good choice. It is post tax income that you would be contributing. What is great about 529s is that the gains/ROI whatever you want to call it is tax free long as it is used for education. No other investment in the world is your ROR/ROI tax free. If you set one up and that kid doesnt go to college you can roll it over to another kid. Anyone can invest/dump money into the account which is great for grandparents, or other family members that would want to help. If you use your gains/ROI for anything other than education the ROI portion would be taxed but not your initial investment. Here is the website/company I started mine with.
I really don't know what any cons would be other than your money is post tax not pre tax.
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Originally posted by tfrye View PostI have a 529 for my daughter and I think it is a very good choice. It is post tax income that you would be contributing. What is great about 529s is that the gains/ROI whatever you want to call it is tax free long as it is used for education. No other investment in the world is your ROR/ROI tax free. If you set one up and that kid doesnt go to college you can roll it over to another kid. Anyone can invest/dump money into the account which is great for grandparents, or other family members that would want to help. If you use your gains/ROI for anything other than education the ROI portion would be taxed but not your initial investment. Here is the website/company I started mine with.
I really don't know what any cons would be other than your money is post tax not pre tax.
https://www.texascollegesavings.com/
Do a search there have been severa threads on this with lots of info
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Have one for both kids and highly recommend it. Even if they don't go to college I think you can pull the money out once they hit 25 (doing this from memory).
I showed it to my son when he started HS and told him that whatever he gets in scholarships, grants, etc. is that much money he has waiting for him when he graduates.
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You will pay capital gains tax on any money not used for education, just an FYI.
Originally posted by TCB View PostHave one for both kids and highly recommend it. Even if they don't go to college I think you can pull the money out once they hit 25 (doing this from memory).
I showed it to my son when he started HS and told him that whatever he gets in scholarships, grants, etc. is that much money he has waiting for him when he graduates.
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I recently went through all the pros/cons of a 529 plan VS a Roth IRA. I like the Roth better. I opened a Roth for my wife and myself. We will max both accounts out yearly and will have plenty for college and should have a good chunk left for retirement. I would look into them both and do what fits your goals best.
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I dont follow, how does a roth IRA help for college?
Originally posted by CSanders View PostI recently went through all the pros/cons of a 529 plan VS a Roth IRA. I like the Roth better. I opened a Roth for my wife and myself. We will max both accounts out yearly and will have plenty for college and should have a good chunk left for retirement. I would look into them both and do what fits your goals best.
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Originally posted by CSanders View PostI recently went through all the pros/cons of a 529 plan VS a Roth IRA. I like the Roth better. I opened a Roth for my wife and myself. We will max both accounts out yearly and will have plenty for college and should have a good chunk left for retirement. I would look into them both and do what fits your goals best.
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