Saving for college - Kids

Are you talking about doing a 529 plan? If so, you can invest in any States 529 plan I think without any sort of penalty. Personally I love them for the basic reason is people (mainly family) give more to my kids than they normally would money wise because they know it is going towards their 529 plan. Sometimes they just give us a check on random days and tell us to put it in their 529 plans because they think that is the best investment for their money (grand kids and great-grand kids education). We have only been doing it now for about 3 years, both kids have a hefty amount already stored away and earning at a decent interest rate.

One last thing though, our financial advisor reminded us. Saving for your kids education is not a sound retirement plan. We always try to remember that when concerned about where to put our own money at.

I just had a kid a couple months ago, and have been thinking about what to do for this as well. I decided on opening up a ROTH IRA for my wife, who doesn't currently have one, as a way to do this. I've already got my own retirement setup going (401k, ROTH IRA, etc), that I feel will be enough for us to both retire comfortably. I talked to a financial advisor because I was looking at the 529 plans and he was the one who suggested starting a ROTH IRA for my wife which I could then use for funds for college for my kid.

If you open up a 529 plan and your kid doesn't go to college, the only thing you can do with that money and not incur a penalty is use it on another kid. Well, if you are only having 1 child, then this is not a very good option. So going with the IRA plan, it allows us to use that money in other ways in the event that our kid doesn't actually go to college.

Another advantage of going this route for us was the ability to choose where to put our money. When you are in the 529 plans, you're sort of locked into their choice of funds, like a 401k. With the IRA, I'm able to put money in whatever funds, etc.

Just my $.02

Thanks for the reminder. I have to start saving for my son's college education. It is going to be expensive in 13 or so years. I'll probably go the 529 route since I will be having more kids. I'll ask my FA tomorrow and see if there are any other alternatives she can think of.

You could move to a Europen country where college is free! Considering how expensive college is getting, it's probably less crazy than it sounds. I mean, if someone offered you the entire cost of your kid's college education in one lump sum and all you had to do was have a working vacation in Europe for a few years, wouldn't you consider it? (or just ship them off by themselves for that matter) Free school plus getting to experience life outside the US? I'm sure there are drawbacks, but that's a lot of upside.

I really don't plan on paying for my son's college. The new post 9/11 GI bill allows me to give him a free ride. I'm not going to tell him that. I'd rather have him work his ass off and let him worry about shit and when he's ready I'll give it to him. Now if something comes up and I want to earn another degree I may end up using it and he'll just have to figure stuff out like his old man.

Have you thought about a variable annuity?