College 529 fund question
Moderator: Aitrus
Re: College 529 fund question
For those that have done a custodial Roth IRA, who did you go with? My understanding is that not all brokerages offer this. Thanks
Ubascuba
Strategy:167054
“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.” ~ Winston Churchill
Strategy:167054
“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.” ~ Winston Churchill
Re: College 529 fund question
Check Schwab and TD Ameritrade. I also like Fidelity, but I think they have certain rules setup for their custodial Roth IRAs.
- Scarfinger
- Posts: 812
- Joined: Mon Jan 30, 2012 12:00 am
Re: College 529 fund question
Fidelity
I am just an average Joe. I have no clue to what the market will do.
Paul Merriman 2 fund strat: (age - 25) x2.5 = TDF + balance into S fund or variation ofTimboSlice wrote: "People really need to stop overthinking this."
- Scarfinger
- Posts: 812
- Joined: Mon Jan 30, 2012 12:00 am
Re: College 529 fund question
Flaws with Using a Roth IRA to Save for College:
Distributions from a Roth IRA, even a tax-free return of contributions, will count as income on a subsequent FAFSA. Regardless of whether the distribution is included in AGI or counted as untaxed income, it may reduce eligibility for need-based aid by as much as half of the distribution amount.
The mere existence of a Roth IRA will not affect eligibility for need-based aid. However, if the taxpayer uses the money in a Roth IRA to pay for college, it will reduce eligibility for need-based aid in a subsequent year. 529 college savings plans have a much more favorable impact on the expected family contribution (EFC) than a Roth IRA.
The 529 is better for college expenses because it doesn't count as income when you use it like a Roth would.
In a perfect world you would have both I guess. I don't expect that my custodial Roth will be used for college and I will encourage my nephew to never touch it until retirement.
Distributions from a Roth IRA, even a tax-free return of contributions, will count as income on a subsequent FAFSA. Regardless of whether the distribution is included in AGI or counted as untaxed income, it may reduce eligibility for need-based aid by as much as half of the distribution amount.
The mere existence of a Roth IRA will not affect eligibility for need-based aid. However, if the taxpayer uses the money in a Roth IRA to pay for college, it will reduce eligibility for need-based aid in a subsequent year. 529 college savings plans have a much more favorable impact on the expected family contribution (EFC) than a Roth IRA.
The 529 is better for college expenses because it doesn't count as income when you use it like a Roth would.
In a perfect world you would have both I guess. I don't expect that my custodial Roth will be used for college and I will encourage my nephew to never touch it until retirement.
I am just an average Joe. I have no clue to what the market will do.
Paul Merriman 2 fund strat: (age - 25) x2.5 = TDF + balance into S fund or variation ofTimboSlice wrote: "People really need to stop overthinking this."
Re: College 529 fund question
Coverdell also doesn't get counted as income. 529 allows you to put more money away for college, but a Coverdell is more flexible and is less costly (and allows you to invest as you please).Scarfinger wrote: ↑Tue Jan 11, 2022 3:36 pm Flaws with Using a Roth IRA to Save for College:
Distributions from a Roth IRA, even a tax-free return of contributions, will count as income on a subsequent FAFSA. Regardless of whether the distribution is included in AGI or counted as untaxed income, it may reduce eligibility for need-based aid by as much as half of the distribution amount.
The mere existence of a Roth IRA will not affect eligibility for need-based aid. However, if the taxpayer uses the money in a Roth IRA to pay for college, it will reduce eligibility for need-based aid in a subsequent year. 529 college savings plans have a much more favorable impact on the expected family contribution (EFC) than a Roth IRA.
The 529 is better for college expenses because it doesn't count as income when you use it like a Roth would.
In a perfect world you would have both I guess. I don't expect that my custodial Roth will be used for college and I will encourage my nephew to never touch it until retirement.
Here is some light reading https://www.thebalance.com/using-coverd ... ge-4154529
- Snapdragon
- Posts: 252
- Joined: Tue Jan 29, 2013 5:26 pm
Re: College 529 fund question
Thanks for sharing the info Bubba
Fund Prices2024-05-21
Fund | Price | Day | YTD |
G | $18.27 | 0.01% | 1.69% |
F | $18.99 | 0.21% | -1.22% |
C | $83.42 | 0.25% | 12.18% |
S | $81.53 | -0.33% | 5.75% |
I | $43.46 | -0.24% | 8.15% |
L2065 | $16.60 | 0.00% | 9.81% |
L2060 | $16.60 | 0.00% | 9.81% |
L2055 | $16.61 | 0.00% | 9.81% |
L2050 | $33.11 | 0.02% | 8.17% |
L2045 | $15.08 | 0.02% | 7.76% |
L2040 | $54.97 | 0.02% | 7.37% |
L2035 | $14.49 | 0.02% | 6.90% |
L2030 | $48.16 | 0.02% | 6.46% |
L2025 | $13.25 | 0.02% | 4.28% |
Linc | $25.81 | 0.02% | 3.62% |