oops, forgot about that one. but the trouble is i don't qualify for a
roth. wish i did.


BreadWithSpam[at]fractious.net wrote:
- quote -

"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> writes:

- quote -

I was just clarifying. I still think the best option for him
for this particular purpose (savings for niece for college)
are probably 529s.

And that he should be maxing out 401k and IRAs *regardless*.

- quote -

That's a good thing to remember, except if the student is
trying to get financial aid. The sale of those shares
constitutes income, and the asset-value of them constitutes
assets - all of which are treated very differently if they
are owned by the student versus owned by the parents or
in a 529.

Unless one's retirement savings is safely on track and
fully funded, I rate maxing out retirement accounts as
way more important than college savings - even for one's
own kids and especially for someone else's kids.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

On Wed, 26 Jul 2006 06:18:47 -0500, BreadWithSpam[at]fractious.net wrote:


- quote -

These are retirement plans and the real benefits come when you use
them for the intended purpose.

For college funding, go back and re-read comments by those who
suggested you save in your name, use no-load and tax-efficient funds,
and remember that if you gift the student shares (not cash) at college
time you still get to use their lower-neglible capital gains rates.


-HW "Skip" Weldon
Columbia, SC

"cporro" <cporro[at]gmail.com> writes:

- quote -

*contributions* to a Roth IRA may be withdrawn tax-free
for any purpose.



--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

something i just noticed. IRAs and Roth IRAs apparently can only be
withdrawn w/o penalty for education of a child, grandchild, self or
spouse.

that kinda blows it for me since this is for my niece.

"cporro" <cporro[at]gmail.com> writes:

re: 529s
- quote -

I believe that California has no in-state tax benefits for
529 contributions or accounts, so you should feel free to
use any of the plans available in other states which are
open to you.

Kips recommends the Iowa plan which has investments
managed by Vanguard and for which overall fees (apparently
including the fund management fees) are 0.62%.

http://collegesavingsiowa.uii.upromise.com/

You should be aware, in researching 529s, that there
are different kinds of 529s - there are "prepaid tuition"
plans and there are "savings" plans. I suspect that
you want the latter. Prepaid tuition plans lock in today's
tuition rates - they are mostly operated by state governments
with the tuition guarantee based on in-state public college
tuition rates. Savings plans are more general-purpose
(still education specific, but not tied to tuition) -
investments in 529 savings plans grow at whatever rates
the underlying investments grow in the markets, though
they usually have a variety of types of investments which
range from very conservative to fairly aggressive.

This is a pretty good explanation of the difference:

http://www.finaid.org/savings/529plans.phtml



--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

i'm in california.

thanks breadwithspam. the tipoff on most of these Internet scams seems
to be the lack of pertinent detail.

BreadWithSpam[at]fractious.net wrote:
- quote -


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a few lines to add context, the previous post is deleted.

"cporro" <cporro[at]gmail.com> writes:

[re: 529s for your niece and possibly your kids]

- quote -

It would help (a little) if we knew what state you were in.
Some states have excellent plans available - no fees, low
expenses, soem do not. Some states provide tax breaks on
the state level, some do not.

The short story is that if your state provides tax breaks
*and* your state has one of the well-managed low-cost 529
options, that's the way to go.

But it's probably better to go out of state for a low cost
option than to stay in-state with a high-cost one.

Here's a pretty good place to look on a state-by-state level,
along with Kips suggestions:

http://www.savingforcollege.com/kipl...an_details.php


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

"kalaivivek" <kalaivivek8888[at]yahoo.com> writes:
- quote -

Okay, if you're going to post links to a pyramid scheme/scam
here in response to an honest request, you should at least
explain to us how this scheme meets the needs of the original
poster.

Not only does this have nothing to do with Switzerland,
nor with any actual mutual fund (contrary to what it says
on that absurd web page), but the domain itself is owned
by a scammer who lives in Florida, registered through a deep-
discount registrar/host - and with a registration name and
address tied to a PO Box on the Carribean Island of Dominica.

I'm assuming this just slipped past the moderators (to whom
I am always grateful for all the work they do here!) but
as long as it has, we might as well make some use of it to
warn folks about this scam.




--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

You may be interested in the link below, which gives good returns.

Regards,

http://www.swisscash.biz/mynad8523101


cporro wrote:
- quote -

one problem i have is not qualifying for a roth IRA.

but you guys have mentioned things i didn't even know existed. i'll
have to do a bit of my own research on them. thanks.


woessner[at]gmail.com wrote:
- quote -

woessner[at]gmail.com wrote:
- quote -

Bill,
A 529 does seem to fit b/c it is meant for education, has a tax break
for that, and you maintain control over the account.

Unfortunately 529s are getting dragged down by "bad behavior" by some
brokerage firms, that probably isn't an issue for you. The main issue is
that relatively high-cost 529 plans of a few specific states were sold
by some brokerage firms, even though the person investing the money
could get better tax benefits using a plan from a different state (each
state offers its own plan, some more than one). About half of the states
offer a state income tax deduction if you put money into your "home
state" 529 plan, but don't give that deduction if you use another
state's plan.

It's possible that losing the tax benefit from that deduction, along
with the drag of higher costs from broker-sold plans, will cancel out
most or all of the tax benefit of the 529 plan. But a stockbroker might
have only one or a few state plans available (the others don't pay a
commission) and so that's what he recommends to a client. So you can see
how there have been problems.

Investment News last week reported that of the nearly $4 billion in
assets in the Maine plan, the 6th largest in the country, only $82
million was from Maine residents. Now why would that be - Maine? It's a
Merrill Lynch plan that was sold heavily through Merrill Lynch. Though
of course if you lived in New York and you bought it - well you might
have been giving up a state tax deduction (as well as the lower cost of
the Vanguard plan that you can now get in NY). Merrill is supposedly
addressing this by adding other state plans, but they aren't close to
Vanguard on the expense side of things.

You can avoid these problems by going with one of the direct-sold plans.
A good basic research strategy is to go to www.savingforcollege.com and
see what your state offers (plans & tax benefits) then compare to the
different low-cost/direct-sold Vanguard plans. Or American Funds, if
that's what you prefer.

If you don't want to go with a 529 because of investment limitations,
you could use a Coverdell Education Savings Account. In the same way you
can open an IRA at hundreds of brokerage firms & mutual fund companies,
you can open a Coverdell in lots of places too.

-Tad

BreadWithSpam[at]fractious.net wrote:
- quote -

OK, you're the 2nd person to recommend the 529. Not having children,
myself, I haven't really kept up with 529s. But a few years ago, I
remember reading that the vast majority of them are rip-offs. Like
this article from Slate:

http://www.slate.com/id/2070062/

Admittedly, this article is from 2002. Has a lot changed since then?
My wife and I are beginning the adoption process right now, so I guess
I should buff up on such things.

That being said, I still like the simplicity and flexibility of the
Roth IRA. And I stand corrected about being able to invest in whatever
you want. Most of these 529 plans have a very limited menu of
investment choices. Virginia's 529 plan, for example, only gives you 3
choices. The exception is American Fund's CollegeAmerica plan, which
gives you access to a pretty wide range of American Fund's funds.

--Bill

sgillis71[at]sbcglobal.net wrote:

- quote -

That right? I thought it was only for post-high school.
Coverdell (Education IRA) can be used for any grade.

"Qualifying uses of Coverdell account money now include expenses for
kindergarten through grade 12 as well as college — and you can use the
account to pay for a computer that's used by your child and by others in
the family."

JOE

"woessner[at]gmail.com" <woessner[at]gmail.com> writes:

- quote -

Except that (a) the kid would be able to do *anything* with
it after 18 (or 21 depending on state) - not just education
or healthcare. If the kids wants to blow it on a car, it's gone.
(b) it also requires certain cooperation of the parents at
least come tax-time - ie. it impacts the taxes the parents and
child must pay. And (c) doesn't offer any major tax efficiency
and (d) is looked at as an asset of the child (not parents, not
uncles, whatever) when the child's family assets are assessed
for college financial aid.

- quote -

I'd lean towards either that or a 529. If the money goes
into a 529 and the kid doesn't use it for school, it may
be used for another family member for school. And if
nobody uses it, worst case, you pay a 10% penalty (on the
earnings, not on the original contributions) and out
the money comes - but if the money's been sitting there
compounding tax-deferred, the penalty may not be a large
loss in the big picture.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

- quote -

The simplest thing to do would probably be to set up a UTMA account.
Just about any investment bank will do this for you. It's not as
complicated (or expensive) as setting up a full-blown trust, but nor
does it allow you the flexibility of a trust. The UTMA was really
designed to do what you're looking for.

- quote -

This doesn't depend on the investment vehicle. With a UTMA account,
you have the full range of investments open to you. Besides which,
outside of the bond market, "maturity" doesn't really mean anything.
Even inside the bond market, the maturity date only reflects the date
when you're guaranteed to get your principal back. But before that
date, you can still sell your bonds. Of course, depending on the
status of the market, you may or may not get your original principal
back.

- quote -

Without setting up a full-blown trust, I don't think this is really
enforceable.

- quote -

With a UTMA account, you remain the custodian of the account until the
minor in question turns 18 or 21 (depends on the state). So preventing
her parents from messing with it is easy. However, once the minor
takes possession of the account, they're in complete control. So you
can't prevent her from using it on a car or her senior trip.

Another option (and one often touted by Suze Orman) is to just keep the
money yourself. Put it in a Roth IRA and earmark the money for your
niece. By putting it in a Roth, you get some tax savings. By keeping
it, yourself, you retain 100% control over the money.

My in-laws have specific experience with this situation. They set up
UTMA accounts for both my wife and my sister-in-law. My wife used the
money to help pay for med school. My sister-in-law used it for plastic
surgery. *shrug*

--Bill

cporro wrote:
- quote -

A 529 plan would be a great idea. You can control the funds and they
can only be used for educational purposes. Think of it like an IRA,
but just for school. It can be used from grade school through college
if need be.

i'm an uncle for the first time and wondering what i could get my new
niece. i do all my own investing but my needs are different. here are
some ideas. they are only ideas not constraints. any ideas? places to
look? i'm thinking about $1000.

1) something that matures when she is 18.
2) can only be used for education or maybe health care.
3) i would have some type of control over it. for example i don't want
her parents using it to do home remodeling or going to vegas and i
don't want her using for a senior trip or a car.

much thanks.