babbledog: 529 Plan - The Worst Thing You Can Do for Your Child Ok, I realize I am being a bit harsh. In fact, I love the 529 plan. I discuss and recommend them for my clients on a daily basis. However, 529 plans are becoming so popular today that parents are starting to forgo their Retirement plans, emergency funds, and other important goals, just to help their children through school. A 529 plan is a college (and only college) savings account that is established by Section 529 in the tax code. It basically allows you to invest after-tax dollars in a fund that grows tax deferred and allows you to take the money free from taxes if used for qualified post-high school education costs. It is a great deal if you are almost 100% sure that it will get used. Parents: please get started saving for college right away, if you have the resources. By resources, I mean that you have done or are in the process of doing the following: 1. Have 3-6 months of living expenses in a liquid savings account 2. Have paid off all high interest credit cards 3. Are on track to have enough money invested for your retirement 4. Have a proper life insurance and disability plan in place 5. Have health insurance that will allow you to cover any and all medical expenses with your cash flow or emergency fund. 6. Have worked with an estate planning attorney to implement your wills, Powers of attorneys, and Living Will. If you are saving for your kid's education before taking care of these necessities, you are taking a huge risk. There are so many opportunities to get funding for college. There are student loans, other financial aid, they can work during college. Who knows, your kids may not even go to college. The next time you see your children; ask them the following question to see what the answer will be: "Would you rather pay for your own college and later visit your parents in their summer home in the Hamptons, or we can pay your college expenses and later move in with you. Easy answer. Take care of yourselves first.

529 Plan - The Worst Thing You Can Do for Your Child Ok, I realize I am being a bit harsh. In fact, I love the 529 plan. I discuss and recommend them for my clients on a daily basis. However, 529 plans are becoming so popular today that parents are starting to forgo their Retirement plans, emergency funds, and other important goals, just to help their children through school. A 529 plan is a college (and only college) savings account that is established by Section 529 in the tax code. It basically allows you to invest after-tax dollars in a fund that grows tax deferred and allows you to take the money free from taxes if used for qualified post-high school education costs. It is a great deal if you are almost 100% sure that it will get used. Parents: please get started saving for college right away, if you have the resources. By resources, I mean that you have done or are in the process of doing the following: 1. Have 3-6 months of living expenses in a liquid savings account 2. Have paid off all high interest credit cards 3. Are on track to have enough money invested for your retirement 4. Have a proper life insurance and disability plan in place 5. Have health insurance that will allow you to cover any and all medical expenses with your cash flow or emergency fund. 6. Have worked with an estate planning attorney to implement your wills, Powers of attorneys, and Living Will. If you are saving for your kid's education before taking care of these necessities, you are taking a huge risk. There are so many opportunities to get funding for college. There are student loans, other financial aid, they can work during college. Who knows, your kids may not even go to college. The next time you see your children; ask them the following question to see what the answer will be: "Would you rather pay for your own college and later visit your parents in their summer home in the Hamptons, or we can pay your college expenses and later move in with you. Easy answer. Take care of yourselves first.

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529 Plan - The Worst Thing You Can Do for Your Child Ok, I realize I am being a bit harsh. In fact, I love the 529 plan. I discuss and recommend them for my clients on a daily basis. However, 529 plans are becoming so popular today that parents are starting to forgo their Retirement plans, emergency funds, and other important goals, just to help their children through school. A 529 plan is a college (and only college) savings account that is established by Section 529 in the tax code. It basically allows you to invest after-tax dollars in a fund that grows tax deferred and allows you to take the money free from taxes if used for qualified post-high school education costs. It is a great deal if you are almost 100% sure that it will get used. Parents: please get started saving for college right away, if you have the resources. By resources, I mean that you have done or are in the process of doing the following: 1. Have 3-6 months of living expenses in a liquid savings account 2. Have paid off all high interest credit cards 3. Are on track to have enough money invested for your retirement 4. Have a proper life insurance and disability plan in place 5. Have health insurance that will allow you to cover any and all medical expenses with your cash flow or emergency fund. 6. Have worked with an estate planning attorney to implement your wills, Powers of attorneys, and Living Will. If you are saving for your kid's education before taking care of these necessities, you are taking a huge risk. There are so many opportunities to get funding for college. There are student loans, other financial aid, they can work during college. Who knows, your kids may not even go to college. The next time you see your children; ask them the following question to see what the answer will be: "Would you rather pay for your own college and later visit your parents in their summer home in the Hamptons, or we can pay your college expenses and later move in with you. Easy answer. Take care of yourselves first.

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Posted Feb 07, 2008

hcjack

Responses to this thread:

Chuck: Hrm... I've been wondering about that kind of thing... Trying to figure out what to do for the kids.

Posted Feb 07, 2008

todd: This is something near and dear to my heart. I have 529 plans for the two girls (which is great because other family can invest in them, too if they want to, which sometimes they do). But I may have shortchanged retirement savings a result for the past few years. This is an excellent post.

Posted Feb 07, 2008

Jim Cowie: these days, the best thing you can do is bury mason jars full of gold coins in the back yard. tell the kids you're playing 'pirate'. give them the map on the day they graduate from high school.

Posted Feb 07, 2008

smckenzie23: Even better, *keep* the gold and give them a bogus map; tell them they are not very good pirates. That's what my folks did.

Posted Feb 07, 2008

mksmith: Here Oliver (my son), this is a "Euro." Keep this safe and tight along with the "Yen" daddy gave you yesterday. You can keep making pretty pictures out of the "dollars" because that's less expensive than buying construction paper.

Posted Mar 29, 2008

mksmith:
Seriously, I created a 529 for Oliver so his grandparents would have a place to put some money. I hope there is a higher education system when he gets to be that age (he's 3 1/2).

Posted Mar 29, 2008

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