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6ballsisall
08-06-2005, 07:26 PM
We want to set up an Educational IRA for our newborn. However, there are about 4 options now and all have different advantages. Which type of account have you guys/gals set up for your kids?

peason
08-06-2005, 07:47 PM
Spent too much money on the MC - kids going to have to go to community college!
But, boy are we having fun now!

Leroy
08-06-2005, 07:58 PM
The one where I keep all the money in my pocket and I decide what I'll pay for, but no special account. Maybe something will turn up here (almost too late for me anyway) but I could not find anything I liked.


They have savings and brokerage accounts of their own, but those are really for educating them on savings and trading.

bigmac
08-06-2005, 08:40 PM
By the time your kid goes to college, tuition for a state university is likely to be pushing $200,000. It would be tragic and foolish not to take advantage of the very significant tax savings that go along with the current educational IRA's. Get a professional to help you - virtually any broker can do it and give you better advice than you'll get here. No offense meant to MC owners...

All that was available for my kids 20 years ago was UTMA. The advantage there was that I paid my kids' taxes at their income bracket rather than mine. Even that saved me a bundle. I kicked in $10,000 each over two years when they were tykes, worked out to over $100,000 each at age 20, September 11 and all...

If you don't have $10 grand sitting around, consider dollar-cost-averaging (http://moneycentral.msn.com/articles/invest/invfund/1304.asp)

BriEOD
08-06-2005, 11:19 PM
Some states such as Florida (which I am a resident of) have a pre-paid program. The Readers Digest is that you pay in what it costs to go to college TODAY for your kid to go to school in 10-15-20 years down the road. It covers all of the tuition no matter what the increase (not including housing and books--their is a plan for that to). If your child elects not to go to school or to a school not a State Univ in Florida you get your money back plus something comprable in interest to a savings account.

It has good points and bad points. You can make monthly payments, but if your kid doesn't use it you could have probably found something more lucrative to put the money into.

http://www.florida529plans.com/

bigmac
08-06-2005, 11:32 PM
Different states have different 529 plans and IIRC, parents can pick the state with the plan that suits their educational financial goals most closely - all the more reason to seek out and get advice from someone who does that kind of planning for a living.

LakePirate
08-07-2005, 12:53 AM
Buy yourself about 150 acres and grow pine trees. In 18 years you can sell them and pay for the kids college.

PendO
08-07-2005, 02:22 AM
If your newborn is a girl just figure Title IX will pay for school if she can swing a golf club or tennis racket (thanks to the football team) ... I like the idea of just setting up a ROTH IRA and maxing it out (as she/he can use the roth to pay for school without penalty), and then having an additional Educational investment such as purchasing tuition at todays prices like a lot of states offer... that, and I am hoping her Grandpa will pay ... or, you could do like my brother, he got married his freshman year and the fed's pay him to go to school b/c he is "low" income ... funniest chit I ever heard 2004 Hemi 1/2 ton with 20" ... bla bla bla ... me I'm still paying my student loans off 250 bucks at a time, and he will never wiff one;)

BriEOD
08-07-2005, 09:42 AM
me I'm still paying my student loans off 250 bucks at a time, and he will never wiff one;)

A little known fact I heard. Did you know if you declare bankruptcy the only 2 debts that cannot be wiped away are 1) court ordered restitution/fines and 2) federal student loans.

Ric
08-07-2005, 12:58 PM
If your newborn is a girl just figure Title IX will pay for school if she can swing a golf club or tennis racket (thanks to the football team) ... I like the idea of just setting up a ROTH IRA and maxing it out (as she/he can use the roth to pay for school without penalty), and then having an additional Educational investment such as purchasing tuition at todays prices like a lot of states offer... that, and I am hoping her Grandpa will pay ... or, you could do like my brother, he got married his freshman year and the fed's pay him to go to school b/c he is "low" income ... funniest chit I ever heard 2004 Hemi 1/2 ton with 20" ... bla bla bla ... me I'm still paying my student loans off 250 bucks at a time, and he will never wiff one;)
great idea on the signature pendo
I always wondered, with the 529's does my kid have to stand in line at the financial aid office with the thugs in gold chains and benz's?
It angers me.