Future College Saving Plan For Our Childrens

A

american gujju

Banned
hello guys
i know this forum is basically for IMMIGRATION.

But i need some info abt college fund or saving for future college tuitions for our childrens.

Any valuable comments?
 
check out the IRA formerly called "education IRA". You can put $500 per child into this IRA each year before Dec 31st of that year (not April 15th of next year like the other IRAs). I believe it's now called "Coverdell savings plan" or something similar to that.

Hope this helps.
-- alaknanda
 
Hello american gujju,

Check out 529 College Savings Plan - I think 529 comes from IRS section same way as 401K. This plan allows you to set pre-tax money for your children's education. Best time to start this plan would be soon after the birth of your child or within a few years, to allow the compounding to kick in.

Please note that the money in this plan is meant to be used only to fund child's education and not for any other purposes. I think there are heavy penalties, if you don't do so..

A caveat is that in case your child gets a scholarship, and you don't need the money then what to do with this money. So you can use it to fund your other children's education. Even if you or your spouse decide to study (after you are 50 years old:) :)), you can take out this money without any penalties.

Check www.fidelity.com or other financial sites.

Thanks

Originally posted by american gujju
hello guys
i know this forum is basically for IMMIGRATION.

But i need some info abt college fund or saving for future college tuitions for our childrens.

Any valuable comments?
Click to expand...
 
Check

on your state plans too; Each state have their own Education Savings plan; for Eg. In PA, We have something called the T.A.P.( Tution Accounr Progaram) This is similar to the 529 plan but more flexible and there is no limit to the amount you can put into this account. You can hold separete account for each child.
penalaties are also not as heavy as in 529.
FYI check on this : www.patap.org
All the very best
 
529 Plans!

Thats all you need to know :-)

Check clarkhoward.com and there are links for 529.

Every state has its own plan. Find one that will benefit you most.

did you guys know that you can use it for your own benefit too i.e. masters/continuing education?

:)
 
http://www.smartmoney.com/college/investing/index.cfm?story=save

http://www.savingforcollege.com/

http://www.sensible-investor.com/savcollege.html

You could save through 529 plans or the education IRA (Coverdell savings plan). Though lately, the 529 plans are not doing very well.

You could also use a site like http://www.sharebuilder.com to have regular stocks/bonds/mutual fund investments (but will be taxed on gains when you sell). But, the small investments at a minimal charge will add up overtime.

Also, you could use laddered CDs, and US treasury/savings bond investments (if averse to risks) but the interest income will be taxed.
 
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Re: Re: Future College Saving Plan For Our Childrens

Originally posted by 180DaysGuy
Hello american gujju,

Check out 529 College Savings Plan - I think 529 comes from IRS section same way as 401K. This plan allows you to set pre-tax money for your children's education. Best time to start this plan would be soon after the birth of your child or within a few years, to allow the compounding to kick in.

Please note that the money in this plan is meant to be used only to fund child's education and not for any other purposes. I think there are heavy penalties, if you don't do so..

A caveat is that in case your child gets a scholarship, and you don't need the money then what to do with this money. So you can use it to fund your other children's education. Even if you or your spouse decide to study (after you are 50 years old:) :)), you can take out this money without any penalties.

Check www.fidelity.com or other financial sites.

Thanks
Click to expand...

180DaysGuy, please do not give wrong information if you don't know the facts. The 529 Plan has undergone major changes thanks to new legislation signed by President Bush (maybe one of the few good things he has done). I don't want to get into the details here, but please visit the various sites suggested by fellow members. I would strongly recommend becoming a member of www.upromise.com. You can open an account for a 529 Plan at any one of the major fund managers such as Fidelity, Vanguard, etc. and link them to your UPromise account. I'm a member of UPromise and have a 529 Plan through Fidelity. It is advisable to start investing early to maximize your gains.
 
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Mavishka:
Does UPromise have Vanguard. I believe the site says that it is coming in Dec.
Thanks
 
Re: Re: Re: Future College Saving Plan For Our Childrens

Mavishka,

Thanks for pointing out as I typed the message today at 6:00 a.m. and was too sleepy to check it. :) :)

So let me correct my messsage and thanks for pointing out.
1) The contri. are post-tax and not pre-tax.
2) You can start it with a $1000 or $50/month.
3) Qualified withdrawals are free from FIT and the assets in the plan can ONLY be used at accredited colleges and universities nationwide.
4) If you have 2 children and the first gets a scholarship then a) you can withdraw tax-free equal to the scholarship or b) you can use it for the 2nd child or c) you can use it for urself.
5) In the worst case you can withdraw it at 10% penalty plust taxes as applicable.

And btw I work at Fidelity Investments although in IT.

Thanks

Originally posted by mavishka


180DaysGuy, please do not give wrong information if you don't know the facts. The 529 Plan has undergone major changes thanks to new legislation signed by President Bush (maybe one of the few good things he has done). I don't want to get into the details here, but please visit the various sites suggested by fellow members. I would strongly recommend becoming a member of www.upromise.com. You can open an account for a 529 Plan at any one of the major fund managers such as Fidelity, Vanguard, etc. and link them to your UPromise account. I'm a member of UPromise and have a 529 Plan through Fidelity. It is advisable to start investing early to maximize your gains.
Click to expand...
 
Oh btw, there are some Credit cards available (forgot which though) which contribute to your 529 plans. They might be having a fee though.
 
Originally posted by 180DaysGuy
Oh btw, there are some Credit cards available (forgot which though) which contribute to your 529 plans. They might be having a fee though.
Click to expand...

You're right, Citibank has one. I have taken the Citibank UPromise Mastercard. Citibank contributes 1% of your statement balance to your account at UPromise. This is in addition to the contribution you'd get by purchasing stuff through the UPromise partners.
 
Don't bet completely on upromise though. It is a 'dot-com'. But it helps adding a small trickle to the college savings.

The only big way to get some decent amount of money is buy a GM car or buy/sell a house through the associated realtors both of which happen rarely. All other upromise contributions are way too tiny and hopefully as time goes by more companies will participate. Just add it as an extra savings (which comes free) to your main college savings.
 
Originally posted by st8
Don't bet completely on upromise though. It is a 'dot-com'. But it helps adding a small trickle to the college savings.

The only big way to get some decent amount of money is buy a GM car or buy/sell a house through the associated realtors both of which happen rarely. All other upromise contributions are way too tiny and hopefully as time goes by more companies will participate. Just add it as an extra savings (which comes free) to your main college savings.
Click to expand...

Anything is better than $0. You're right in that buying a house or a car will add substantially to your UPromise account. I think UPromise is here to stay. Just check out the number of merchants being added to their list each day. Also, you get a 10% contribution if you dine at their participating restaurants.
 
Yes, free money is always good. Even if one can end up with about $100, it definitely won't hurt.

Though the number of restaurants seem huge (about 7000 or so), Upromise has just hitched itself to the iDine program (http://www.idine.com). Probably, iDine became a participating vendor. But, it works only for those who dine out a lot at the participating restaurants.

But even a $100 a year will add up in the long run.

Don't be so sure that it is here to stay. Bigger companies of the 'dot-com' era with far more customers and partners have bitten the dust. Since it is of no cost, it is worth a try.
 
Well, even if they bite the dust you have nothing to lose, right? They transfer your account balances to your 529 Plan at regular intervals (if I remember right it's quarterly or semi-annually). Once it's transferred it's yours, they cannot take that away from you. So really there's NO risk at all in joining UPromise. You agree st8? Thanks.
 
Caution....

One more caution....

When we save in 529 plans which will be considered the Childs Asset......it will affect the scholarship the child will get....

It will reduce it......Hence you have to decide, if you want to get total scholarship(A lot of free money) or some savings on tax...

Please make sure U do UR research on this...I have been researching on these things for quite some time....I havent yet reached a conclusion as to what I shud do to save for my kids college...
 
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