Comments on: Introduction to 529 Education Savings Plans

By: William

William — Tue, 18 Dec 2007 19:52:42 +0000

What about private school K-12. Can a 529 savings plan be used for those expenses? If not, then I think its cheaper to roll the dice on private school in hopes that you won’t have to pay for college.

By: MossySF

MossySF — Sat, 17 Feb 2007 16:34:03 +0000

1) Just the principle from your Roth IRA may not be enough to pay for college. Especially if you have multiple kids.

2) Roth IRA limits are just so puny.

3) Who says someone contributing to a 529 isn’t maxing out their Roth IRA already? (E.g. point number 2 — the puny limit.)

By: Tim

Tim — Sat, 17 Feb 2007 06:09:15 +0000

I have the same thoughts as Dustin. With the Roth you have the flexibility of using it for retirement if the college aid is not needed. If it is needed for college, then you can pull out an amount less than or equal to your principal without penalty for educational purposes.

By: jim

jim — Sat, 17 Feb 2007 02:33:57 +0000

The two accounts are for vastly different things, this isn’t an account for you to save for another reason, it’s purposely for education. The reason why you wouldn’t do an IRA is because you can’t withdraw from it early for education, which these plans let you do.

By: Dustin

Dustin — Sat, 17 Feb 2007 00:06:39 +0000

What benefits would a College Savings Plan get me that a Roth IRA would not? Both are tax deferred. Roths only have withdraw penalties if the amount is taken out before the 59.5 year date and then it is only on interest earned. And it is understood that you would take out not interest first. And CSP restrict what I can invest in. And then there is the issue of if the kid does not actually go to college. If that is the case, the money still has to go to somebody in the family for education purposes otherwise it is heavily tax (similar to early withdrawal of IRAs).

Why not just do an IRA?