Saving for kids college .... instead of 529 you can start Roth IRA in their name

[mettastar]

Just now, Spartan said:

paying one time tax is better than paying loan for 30 years with 10+% interest rate.

Ya agreed .. roth ira is good .. just saying earnings are subject to tax thats all

[vaakel_saab]

https://personal.vanguard.com/us/whatweoffer/college/vanguardugmautma?lang=en

[Spartan]

16 minutes ago, mettastar said:

That means 100% of your withdrawals can go to college expenses. If you’re not 59½ yet, withdrawals of earnings will be subject to income taxes, but not an early withdrawal penalty, as long as the cash is used for college expenses.

 

Subject to income taxes annadu so if we withdraw less than taxable income bracket then no taxes probably

yup a time lo income takkuva untadi unless they are already doing some intern research job,,,which will pay for fee and no need to dig into IRA

[dkchinnari]

2 hours ago, mettastar said:

Ya agreed .. roth ira is good .. just saying earnings are subject to tax thats all

• Contributions and earnings grow tax free.

[mettastar]

20 minutes ago, dkchinnari said:

• Contributions and earnings grow tax free.

If you with draw them after 59½ then tax free .. if not penalty and tax on earnings .. education pupose ki without penalty theeakovachu but earnings are subject to taxes

[k2s]

16 hours ago, Spartan said:

recent ga came across article. brief overview is.

1 - for you child , start paying some salary for their chores not exceeding $2100 per annum. They can contribute all that amount to their Roth IRA and no need to worry about FICA and medicare taxes for them.

2- for kids, you can match additional amount equal to how much they earned, parent and grand parent as gift matching.  so total 6K varaku.

3- this ROTH IRA they can withdraw for their college expenses without penalty.

4- for federal FSA aids, there is workaround to withdraw that amount in 3rd and 4th year for their college.

by this u can bypass the strict rule of 529 should be used only for college expense anedi.

if they dont use it for their college, the roth ira, they can use it for anything in their life...

and you all know ROTH IRA growth beats 529 growth anytime .

Supporting links and reading.:

https://www.fool.com/investing/2020/11/14/surprise-you-can-use-a-roth-ira-to-pay-for-college/

https://www.marottaonmoney.com/do-children-need-to-file-a-tax-return-to-fund-their-roth-ira-2020/

https://www.investopedia.com/529-plan-vs-roth-ira-for-college-4771260

 

@k2s @psycopk @Anta Assamey

.. monthly contribution nenu cheyyanu.. intlo expenses ki all my pay is gone.. 

so additional income kavali for this Kids IRA ki.. how to get that additional income anedi 

[Spartan]

1 minute ago, k2s said:

.. monthly contribution nenu cheyyanu.. intlo expenses ki all my pay is gone.. 

so additional income kavali for this Kids IRA ki.. how to get that additional income anedi 

@k2s

[k2s]

3 hours ago, mettastar said:

Earnings grow tax free kaani .. college kosam withdraw chesthe its taxable but no penalty anta

Completely tax free and penalty free if you with draw after you turn 59½ yrs

 

3 hours ago, mettastar said:

That means 100% of your withdrawals can go to college expenses. If you’re not 59½ yet, withdrawals of earnings will be subject to income taxes, but not an early withdrawal penalty, as long as the cash is used for college expenses.

 

Subject to income taxes annadu so if we withdraw less than taxable income bracket then no taxes probably

+69

andukey i tried to open MPI (whole life insurance) for kids.. its much better than 529 and IRA.. tax free withdrawals 

But WA state ki Kids ki MPI plan support ledu.. see if texas and CA has it... @Spartan 

[k2s]

28 minutes ago, mettastar said:

If you with draw them after 59½ then tax free .. if not penalty and tax on earnings .. education pupose ki without penalty theeakovachu but earnings are subject to taxes

+69696969696969696

ROTH IRA antey ee retirement 59.5 yrs tarvata withdrawals ki taxfree. if you withdraw before that you have to pay taxes on gains/earnings

[k2s]

3 hours ago, Spartan said:

yup a time lo income takkuva untadi unless they are already doing some intern research job,,,which will pay for fee and no need to dig into IRA

mympi.com ee check karo.. and then talk.. 

[Spartan]

11 minutes ago, k2s said:

mympi.com ee check karo.. and then talk.. 

 

13 minutes ago, k2s said:

 

+69

andukey i tried to open MPI (whole life insurance) for kids.. its much better than 529 and IRA.. tax free withdrawals 

But WA state ki Kids ki MPI plan support ledu.. see if texas and CA has it... @Spartan 

[karna11]

54 minutes ago, k2s said:

 

+69

andukey i tried to open MPI (whole life insurance) for kids.. its much better than 529 and IRA.. tax free withdrawals 

But WA state ki Kids ki MPI plan support ledu.. see if texas and CA has it... @Spartan 

I also took whole life , idi we have to pay only untill they turned to 18 years kada?

[k2s]

1 minute ago, karna11 said:

I also took whole life , idi we have to pay only untill they turned to 18 years kada?

yup..and then decide if they want to contribute or let it grow till their retirement. 

[dkchinnari]

23 minutes ago, k2s said:

yup..and then decide if they want to contribute or let it grow till their retirement. 

mpi best out of 3?

[k2s]

1 hour ago, dkchinnari said:

mpi best out of 3?

S