529 plans
Should we?
College gets more expensive ALL the time. We could plan and contribute quite a bit to Jasper's college education, and he could still begin his adult life with a load of student debt.
He may not even want to go to college. Would we offer him some money to follow other routes?
529 college savings plans are tax deductible up to $2,000 per couple per year. That would be nice.
It's tax free when you use it for college related expenses.
We, as parents, retain control over the account. And, we can change who it's for.
We *WILL* have to pay taxes if we withdraw the money and use it for non-college related things.
The Oregon College Savings Plan gets the highest rating in Oregon from BankRate.com.
The initial contribution is $250. I'm pretty sure that's more than we currently have in the change jar for Jasper. Then, there's a minimum monthly contribution of $25 a month. So, that's a minimum $300/year contributions. Over 17 years, that's a little over $5,000 for college. That doesn't include ANY gains - strictly contributions.
There's a .2% yearly management fee, and the $20 yearly fee is waived for Oregon residence.
Given college costs continue to rise, factor in inflation, I'm guessing that would be about equal to the almost $1,000 my parents pitched in for my college expenses.
Can we afford to do this, putting an extra $25/month in our "can't touch it now" money pool?
I like the tax benefits, the control, and the incentive to go to college that offering to pitch in some would create.
But I'm still undecided.
What do you think?
College gets more expensive ALL the time. We could plan and contribute quite a bit to Jasper's college education, and he could still begin his adult life with a load of student debt.
He may not even want to go to college. Would we offer him some money to follow other routes?
529 college savings plans are tax deductible up to $2,000 per couple per year. That would be nice.
It's tax free when you use it for college related expenses.
We, as parents, retain control over the account. And, we can change who it's for.
We *WILL* have to pay taxes if we withdraw the money and use it for non-college related things.
The Oregon College Savings Plan gets the highest rating in Oregon from BankRate.com.
The initial contribution is $250. I'm pretty sure that's more than we currently have in the change jar for Jasper. Then, there's a minimum monthly contribution of $25 a month. So, that's a minimum $300/year contributions. Over 17 years, that's a little over $5,000 for college. That doesn't include ANY gains - strictly contributions.
There's a .2% yearly management fee, and the $20 yearly fee is waived for Oregon residence.
Given college costs continue to rise, factor in inflation, I'm guessing that would be about equal to the almost $1,000 my parents pitched in for my college expenses.
Can we afford to do this, putting an extra $25/month in our "can't touch it now" money pool?
I like the tax benefits, the control, and the incentive to go to college that offering to pitch in some would create.
But I'm still undecided.
What do you think?
posted by Amberlynn @ 5/17/2006 09:44:00 PM
2 Comments:
At 5/19/2006 7:46 AM,
Anonymous said…
If you go by Rich Dad Poor Dad's method you don't simply plunk it down somewhere safe but you do the "bigger better" trade thing with real estate or stocks to make the money grow very quickly.
Me... guess I would like to do both. We know we are not going to be able to save nearly enough (we put money in a mutual fund every month for the kids college) to pay for all the kids college. They know they are going to have to work hard to pay for part themselves. I will probably have to start bringing in an income while they are in college to help out and I'm working on my skills so it can be doing what I enjoy (travelling and teaching and selling my art.) I skimmed "The Two Income Trap" yesterday and it sounds like this fits into their "good to have a stay at home parent who is able to work as back-up when it is needed. Oh, and my kids will probably have to do as I did... go to teh state school you can afford instead of all the fantastic private and far-away schools I got accepted to but couldn't afford without ending up with a huge debt load.
so...the 529 plan sounds good. Your kid might not want to go to college but then maybe you would get to use the money to go back to school yourself... just for fun. (I was very taken with the idea of make your money do the work so you can work to learn instead of work for money from RDPD.)
At 5/19/2006 1:37 PM,
Amberlynn said…
Thank Lyric, I think you're right. And the idea of using the money to go back to college myself... niiiiice.
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