So better late than never, but I am getting ready to start a serious savings plan for DS's college. I've been doing quite a bit of reading, but would like some real world experience from those that have recently been there. What is the best type of savings vehicle, in your opinion? Put it in the kids name? Your name? Grandparents name? I've been reading that is a good way to help maximize financial aide, that you don't really want any money in the kids name. What say you, smart folks? This was not something that was available to me or DH due to family circumstances, so we have no experience. DH paid for it as he went, working full time and going to college, I don't want DS to have to do that, although I recognize that he needs to have some ownership and am not planning on paying for every single thing. To my knowledge, there is no huge inheritance coming my way anytime soon either, LOL. Time is going by QUICK, he is in 5th grade and if the past few years are any indictation, it will be here before I know it. He will likely get some sort of scholarships, but am not counting on that. I just know I don't want to be taking out a second mortgage or dipping into the 401K to pay for it when it comes. I will probably consult some sort of financial planner in the near future as well. :allears: :allears: :allears:
???? I didn't ask about which college to choose, I am asking about what type of savings/investment plan I need to choose. We are no where near picking the college itself. Perhaps you ought to go back for a refresher on reading comprehension? 8)
KDC, the main accounts used for educational purposes are Coverdell/ESA, 529plans and UGMA/UGTA accounts. All of them have their unique features/benefits for different tax situations, education needs/uses, and budget restrictions. I tend to recommend the 529 plan because there are no income restrictions and there are no age restrictions for the beneficiary. Also, contributions allowed are extremely generous, but know that the gift tax will apply to contributions over $13,000/yr. About the only thing you have to remember with a 529 is that the money can only be used for qualified expenses of post-secondary institutions. Where the ESA can be used for primary, secondary or post-secondary and a UMGA can be used to cover any child-related expenses. But if you know these funds will be used for college, a 529 is usually the way to go. *Usually*, the state 529 plan is the best option vs opening a brokered 529 plan that will cost fees and commissions of both an advisor and the fund company, i.e. Fidelity, Franklin Templeton, etc. NC 529 plan accounts can be opened on the CFNC.org website. Feel free to pm me if you have specific questions. And I applaud your decision to start saving now! Disclaimer-I happen to be a Financial Advisor just answering your question with the knowledge that I have...not trying to advertise in any way. :lol: Thanks!
:hurray::hurray::hurray: Thank you so much!! At least I have a direction to go in now. I really appreciate the info. That is what I was leaning towards, but am paralyzed with indecision, LOL. Heaven knows I don't want to screw it up.
