Plenty of states offer low cost S&P500 index funds in the 529. Florida and Utah are two states that come to mind and you don’t have to be a resident of Utah to enroll/fund it.
Really confused by this video. 529 plan has index options, so it's just wrong about it not having good investment options. Finally, roth ira deductions for college will be counted as income. 529 don't. Also roth ira can only work if kids is making income which the earliest can be when they are like 16 and its barely anything.
One major point of the 529 is that you will have access to more than you have contributed. The Roth IRA may have better returns on your contributions, but if you can’t access those returns and use them for college, then it’s not much better than a savings account (with respect to paying for education). If I put in $30k over 15yrs, I’m hoping to have more than that when I need it. If I’m only going to have access to my $30k, what’s the point?
The thing he didn’t reference and people probably need to be aware of is that you can only probably withdraw contributions for qualifying life events to escape the tax penalty before 591/2. Bit misleading.
You’re wrong and he is right. You can withdraw your original contribution without paying penalties or taxes. You can’t withdraw the PROFIT without paying tax and feee.
you can start 529 as soon as your child has a ss number. for roth, you have to wait until they can prove income like around 16 and now you can roll over 35k from 529 to roth. 529 better because you can start earlier
I think your info on 529s is badly outdated. I'm in the CA fund, which is not even one of the highest rated, but, I invest in an S&P500 index fund within the 529..at an expense ratio of 0.04%, and my investment has way more than doubled over the last 9yrs. Yes...I've been in that index fund for 9yrs - that's not recent - you should take a look at the funds actually offered in 529s. Also, 529s are no longer just for higher education - you can now also use up to $10k per year to pay for K-12. Also your plan to use an IRA to pay for college just doesn't work. Given you won't likely be able to get the account opened until your child is earning AND paying tax on those earnings...so around 14, the annual Roth contribution limits mean you really will end up with about $35k that is penalty free accessible from the Roth by the time they are attending college..the *average* cost of 4yrs of college in the US is $110k...so how does this pay for college?
A Roth IRA is always better. I Sell Cash Secure Put/ Cover Call and earn a monthly between 2% to 4% low-risk return. No way 529 or 401K allows self-investing of return like this.
I maxed out my Roth IRA and contributed to 529 plans for my children’s college funds. I was able to save enough to pay for both tuitions. Can I roll the leftover money into my Roth IRA and my wife’s Roth IRA in one year? Can we move $35,000 into each account or is the limit $35,000 per year for only one account? I believe that there is an extra $120,000 in the 529 account we will not be using.
Ask Mat: matsorensen.com/ask-mat/
Plenty of states offer low cost S&P500 index funds in the 529. Florida and Utah are two states that come to mind and you don’t have to be a resident of Utah to enroll/fund it.
I've never even heard of a 529 lol. So thank you for the info! earned my sub
You are wrong about 529 investment options. You can sign up for utahs 529. We live in Tx. Plenty of options and funds.
There is no limit per year that you can put in a 529 plan (in Texas), there may be a cap on total contribution but not per year
Very informative! Thanks!
Really confused by this video. 529 plan has index options, so it's just wrong about it not having good investment options. Finally, roth ira deductions for college will be counted as income. 529 don't. Also roth ira can only work if kids is making income which the earliest can be when they are like 16 and its barely anything.
One major point of the 529 is that you will have access to more than you have contributed. The Roth IRA may have better returns on your contributions, but if you can’t access those returns and use them for college, then it’s not much better than a savings account (with respect to paying for education). If I put in $30k over 15yrs, I’m hoping to have more than that when I need it. If I’m only going to have access to my $30k, what’s the point?
What do you recommend if your income is too high to participate in the Roth IRA?
Back door Roth IRA read on it
The thing he didn’t reference and people probably need to be aware of is that you can only probably withdraw contributions for qualifying life events to escape the tax penalty before 591/2. Bit misleading.
You’re wrong and he is right. You can withdraw your original contribution without paying penalties or taxes. You can’t withdraw the PROFIT without paying tax and feee.
Can you do both for kids?
Serious question: at what age is it not weird per the IRS for a kid to have earned income?
Exactly, kinda bullshit.
you can start 529 as soon as your child has a ss number. for roth, you have to wait until they can prove income like around 16 and now you can roll over 35k from 529 to roth. 529 better because you can start earlier
My 8 year old maxed out her Roth IRA this year
I like this idea
So which best for my new born
I think your info on 529s is badly outdated. I'm in the CA fund, which is not even one of the highest rated, but, I invest in an S&P500 index fund within the 529..at an expense ratio of 0.04%, and my investment has way more than doubled over the last 9yrs. Yes...I've been in that index fund for 9yrs - that's not recent - you should take a look at the funds actually offered in 529s. Also, 529s are no longer just for higher education - you can now also use up to $10k per year to pay for K-12. Also your plan to use an IRA to pay for college just doesn't work. Given you won't likely be able to get the account opened until your child is earning AND paying tax on those earnings...so around 14, the annual Roth contribution limits mean you really will end up with about $35k that is penalty free accessible from the Roth by the time they are attending college..the *average* cost of 4yrs of college in the US is $110k...so how does this pay for college?
A Roth IRA is always better. I Sell Cash Secure Put/ Cover Call and earn a monthly between 2% to 4% low-risk return. No way 529 or 401K allows self-investing of return like this.
Complete garbagio. It’s like saying hey you know what’s better than a 529, make more money and you don’t need a 529.
I maxed out my Roth IRA and contributed to 529 plans for my children’s college funds. I was able to save enough to pay for both tuitions. Can I roll the leftover money into my Roth IRA and my wife’s Roth IRA in one year? Can we move $35,000 into each account or is the limit $35,000 per year for only one account? I believe that there is an extra $120,000 in the 529 account we will not be using.
Grand babies
This is a better explanation and video. ua-cam.com/video/vAwX7ybrONo/v-deo.htmlsi=VeAaexeI81PzQWYv
$35,000 lifetime maximum.