Best Place to Put College Savings?

After doing a bunch of research I came to the conclusion that the best place for me to put away college savings for DS is a 529 account. The beauty of the 529 are, earnings are not taxed and you can designate yourself or another child as beneficiary of the money in the event the primary beneficiary got a full scholarship or decides against college. And only 5% of it gets counted when applying for financial aid.

...But after speaking to my brother, he mentioned a Roth IRA is even better if you can set up your child as an employee and pay him/her the money which will go towards his Roth IRA.

I seriously never thought of it but maybe it's worth considering?

Just curious, where do the parents here stash away their DC's college savings?

Message edited 1/12/2011 10:46:54 AM.

Re: Best Place to Put College Savings?

We have some money in a 529, but are now looking into other options since there are a lot of stipulations with a 529. DH doesn't like the fact that it can only be used for school so he doesn't want all the saving we have for DS to go to that should he get a scholarship or something we can still access that money for him for other things. We also have an account with Upromise.com, everytime we shop online through their website a percentage of what we spend goes into the 529 account for DS.

Message edited 1/12/2011 11:14:38 AM.

Re: Best Place to Put College Savings?

thanks for the site, i'll have to check that out!

Re: Best Place to Put College Savings?

I'm pretty stupid when it comes to finances, but I don't like the idea of college savings account. DH and I both worked our way through college and paying and payed off our own loans. It did a lot for our characters and while his parents could not afford to help, mine could and didn't. They shower us with gifts, so its not like they are stingy or anything.

I think there should be savings put aside, but I think it should be more flexible. The mention of a Roth IRA has been made to us for DS's future, and we are considering it for sure.

It also helps us write off some taxes, I'm not sure how, and it makes my head spin, but I'm sure this is why it was suggested to us.

DH I and I are going to talk it over with his accountant during tax time and well decide then.

Message edited 1/12/2011 2:40:08 PM.

Re: Best Place to Put College Savings?

right now we have a 529 and a savings account.

dh is an accountant so to be honest I decided not to put too much of my brain into this one and let him figure it out (I also think more along the lines of PP in regard to college saving whereas dh is adamant about paying as much as possible).

I actually like the idea of a roth IRA. I am going to talk to him about that.

Re: Best Place to Put College Savings?

The problem with the ROTH Ira is that there is a requirement of earned income and the annual contribution is capped at $5000 under 50 and within AGI limits.

Re: Best Place to Put College Savings?

Re: Best Place to Put College Savings?

Posted by Ophelia

Posted by morgie124

annual contribution is capped at $5000 under 50 and within AGI limits.

this is not a problem for me

Re: Best Place to Put College Savings?

Posted by morgie124

Posted by Ophelia

Posted by morgie124

annual contribution is capped at $5000 under 50 and within AGI limits.

this is not a problem for me

\

More of a concern but the AGI limits may be preventive anyway.

Re: Best Place to Put College Savings?

Right now it's all in 529s predominantly for the tax benefit. When I start maxing that out ($10k for NYS), I'll put it in an investment account for each of them that I will manage.