Saving for College

Threemuch · 07-13-2007, 01:01 PM

How are you iFishers saving for your children's edumacation? I was thinking about opening a 529 plan, but I don't know anything about it and was wondering if any iFishers had any input?

Chrome Bumper · 07-13-2007, 01:17 PM

Our's is in Mutual funds. Taxman will be getting a bite of it.

Norm · 07-13-2007, 01:42 PM

Mine is in stocks, the 529 was too late and too restrictive for me. I just need to make sure the stocks are held two years for the lower capitol gains rate. I wish there was a better Federal tax break for college tuition. I hope my pickup lasts another 10 years

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Fish Killer · 07-13-2007, 02:23 PM

I don't have any kids and my parents didn't save for my education. But when I start having kids in the next few years, I will start them a Roth IRA. The interest is the same as a mutual fund, the only difference is the money will not be taxed when it is pulled out for education.

Joe Schwab · 07-13-2007, 02:32 PM

You guys that have the income capacity to save for kids are fortunate. We had just enough to keep them in food, clothes and entertainment. They all made it through major Universities on their own with a little help along the way. Summer jobs, law clerking, scholarships, part time jobs at school. There was no goofing off at college and they well knew it. They all have carreers that surpass in income what I and my wife made combined several times over. It can be done. I'm proud as heck of them and they know the value of their education.

Good for you for saving for your kids education! I just believe that a little work on their own can make it that much better.

julezilla · 07-13-2007, 02:52 PM

We used the Oregon College Savings plan, a 529. I liked it because the amount of risk (and therefore potential return) is based on how many years until the money is needed. So far it's done quite well. Another thing I like about it is that if the child who's name it's in doesn't use all the money, it can be passed along to a sibling with no penalty.

wsuweston · 07-13-2007, 02:57 PM

529 is the program where you buy "credits" before the kids are in school, correct. If so sounds like a great program.

TheRogue · 07-13-2007, 04:11 PM

It's a tough call for my wife and I. We both paid our own way through college, grants/loans/work. It made us appreciate the education more, I think....

I do know we will supply vehicles, insurance, etc.; and of course moral support and care packages.....but that may be it.

7 years till my daughter is ready for college.....man where did that time go??

TR

Fsh2Max · 07-13-2007, 06:37 PM

My wife and I used the equity in our home and our salaries to put our two kids through UC Berkeley and Rice University. In the beginning we both wondered how the heck are we going to pay for both colleges but it all worked out.

Now, one is attending Harvard Medical school and is getting loans to pay for the 4 years. The other is at Columbia getting her PhD. in Psychology and is getting student loans to pay for the 5 year program.

Norski · 07-13-2007, 06:48 PM

"O K here is what I was taught, you have to start young, todays world to pull it off, but us older folks can stell do it, just not as much.
I was taught by my grandfather, at the age of 13, just befor he died.

Everday, when you get home, take all of your change out of your pocket, take all your dimes out and put into a quart jar, at the end of 3 mounths you well have enough to buy some stock in the stock market, if that stock splits you just doubled you income.
If you are my age, use quorters, in 3 mounths you have enough to buy stock that cost more, if that splits you just made double.
If you do this every day, in the end you will be in the best shape than most.
Now if you pick a stock that go'es south, not my falt, you picked it.
If you are susfull, and you start at 18 years of age, and can read stock, up's and down's, you well be able to retire at 50, with what ever you want.
Trust me, been doing it for 50 years, and I am about done with the working world.

Motor Mouth · 07-13-2007, 07:02 PM

Quote:

Originally Posted by wsuweston

529 is the program where you buy "credits" before the kids are in school, correct. If so sounds like a great program.

Maybe, depends on the program. WA has a prepaid program, buy enough credit to equal the # of years you want to send the kid to school for. Done. You know exactly what you are getting.

OR has a program that you sock away $ and it can grow (or decline) over time with the market. This is a variable plan, you are paying either with a front end sales commission, or, if you hold it for a short term (i.e. ~ 7 years, you may pay to sell). Either way, you pay through reductions of fund return, called 12b-1 fees. You might be able to get away with less invested (market goes up) than a prepaid, but might end up with less than you started with (market goes down - to lose all your $, not likely, but a serious hit could occur).

Each has it's own benefit and drawbacks. If really saving for school, 529 is the way to go. Which one, research with your specific needs and situation in mind.

Point-of-Sale Clerk · 07-13-2007, 11:12 PM

401K... but it is difficult to use if you have more than one student in college at a time...

In theory I am done paying for both kids now, they have to pay for grad school on their own

Bill Monroe · 07-14-2007, 02:37 AM

I sold my boat, then fussed and puttered through some of the incidentals term by terms then eventually bought another boat from myself in our 401.

I've opened Oregon college mutual accounts for the grandkids, but like their aunt and uncle, they'll have to do some student loans and work as well.

Snug 2 · 07-14-2007, 05:07 AM

Motor Mouth, you can buy an Oregon 529 plan directly from the sponsor and not pay a sales fee. Most are advisor sold, but there are ways around that.

As far as programs, the Oregon College Savings plan is a good way to accumulate for a child's schooling. There are lots of rules, but basically, the asset grows tax free if used for college. If you live in Oregon you can usually deduct the first $2,000 per year of contribution off your taxes (consult a tax advisor).

Other options would be the Coverdell Education Savings Account, Uniform transfer to Minors account, various trusts... so many options...

Threemuch, if you have additional questions contact me directly.

WaterDog · 07-14-2007, 08:52 AM

Quote:

Originally Posted by TheRogue

It's a tough call for my wife and I. We both paid our own way through college, grants/loans/work. It made us appreciate the education more, I think....

I do know we will supply vehicles, insurance, etc.; and of course moral support and care packages.....but that may be it.

7 years till my daughter is ready for college.....man where did that time go??

TR

I paid for all of my collage as well. From 17 on I gave up my summers and worked. Worked a lot. Was lucky to have work that required lots of hours and lots of pay.

Finished school owing nothing.

Daughter is one year from college and although we will help, she will for the most part earn it on her own. It certainly makes one appreciate that sheepskin if you really earn it (not just getting good grades).

drano100 · 07-14-2007, 01:51 PM

I feed mine lots of healthy food, send him to the best football camps I can, have him work with a few friends that played in the NFL, and enrolled him last year at L.O high. I also push hard at the school work another reason for L.O. He loves playing ball( and has skills) so its not me pushing it, if it were up to me he would play golf. I'll let him decide on who he accepts a scholarship from. If that does not pan out he can work like I did to pay for school, I'll help some but they work harder and learn more about responsibility when the money it is out of their pocket.

Threemuch · 07-16-2007, 08:11 AM

My parents gave me a great gift in putting me through my secondary education, four and a half years out of state tuition towards a mechanical engineering degree. They did it for five kids. It's a tradition I want to continue.

Sure, it can be done on it's own, with lots of grants and scholarships and part time jobs. But if a kid is ready and serious about preparing to contribute to society and be all he or she can be, I will pay. Gladly.

I remember being a junior in high school and my dad saying "You just get into the best school you can, don't worry about what it costs, there's a way." I had NO idea what a gift that is at the time. But I can't wait to say those words to my son or daughter.

We are looking to adopt out of the foster care system, and one of my biggest concerns is being financially prepared, especially for an older child. It looks like 529 plan for me.

CATCH AND EAT · 07-16-2007, 09:20 AM

Like many here I worked my way through college and pretty much paid for it myself. Parents paid for car insurance and my phone bill. It was up to me for the rest. They did what they could for me but I knew they had my sister to put through college too a few years later.

As for my kids, I have three of them Kurt. One is off to college here in a month and a half and she will put the hurt on the pocket book. Her education is $32k a year of which she got grants and scholarships of $16K. We started a 529 for her and the other kids about 6 years ago and put a little away each month. Her first year is paid for and part of her second year. After that I may need to sell some tuna gear because I will have two kids in college by the time she is a senior. I have a lot more time to save up for my 8 year olds education. Just wish I had started earlier for the benefit of my oldest and my pocketbook.

PayDay · 07-16-2007, 09:42 AM

Good advice from Snug 2. Buy the Oregon 529 plan direct, deposit $2000 per year and take the 9% Oregon tax deduction ($180 bucks). You can choose from several investment options and not pay a broker fee. It worked well for us.

Plus, encourage your kids to get on track to take any advanced credit courses they can while in high school. In addition to the AP classes which require tests for credit, high schools have cooperative arrangements with the community colleges to offer college credit for classes that are passed with at least a "B". Most of these credits automatically transfer to in-state schools. Both of our kids started school (UofO and OSU) with one full year of college credits earned in high school. First one graduates this summer in 3 years plus 1 short summer term = a big money saver.

Gus Orviston · 07-17-2007, 03:21 PM

wow.. surprised at some of the answers.. 529 offers quite a range.. no specific stocks. .but mutual funds perform as well as most stock.. if you are betting on the come of a big payout.. well. doubt you will have that money when the kids go off to school any hooo. With the tax you save in a 529 ,, weight it against some potential stock blow out!?

nothing is guaranteed ,,but the Oregon plan has funds that are 9% and much higher returns.

We have 3 accounts.. and whether paying for it makes you appreciate it or not.. you got to have the grades to get in.. and the parent sets the tone.. and in our family you will need to maintain grades to get the family perks.. again.. the family sets the tone.

I hope to teach my children about saving.. saving early and paying themselves first.. if they go off to college and there is nothing from me.. they have learn very little about saving then IMO.

I also think it is my part to put children through college and not be a burden on society.

gus