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: 811
- 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: 811
- 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: 251
- Joined: Tue Jan 29, 2013 5:26 pm
Re: College 529 fund question
Thanks for sharing the info Bubba
Fund Prices2024-04-26
Fund | Price | Day | YTD |
G | $18.21 | 0.01% | 1.36% |
F | $18.63 | 0.27% | -3.10% |
C | $79.85 | 1.02% | 7.38% |
S | $78.29 | 0.78% | 1.55% |
I | $41.48 | 0.50% | 3.22% |
L2065 | $15.89 | 0.80% | 5.08% |
L2060 | $15.89 | 0.80% | 5.08% |
L2055 | $15.89 | 0.80% | 5.08% |
L2050 | $31.87 | 0.68% | 4.13% |
L2045 | $14.54 | 0.64% | 3.94% |
L2040 | $53.14 | 0.60% | 3.78% |
L2035 | $14.04 | 0.55% | 3.58% |
L2030 | $46.78 | 0.50% | 3.41% |
L2025 | $13.02 | 0.29% | 2.45% |
Linc | $25.43 | 0.23% | 2.10% |