It is a good idea to put small amounts into a 529 or Coverdell. Because they behave more like ROTHs. Let them compound for the next 18 years tax-free. Strategically it makes sense to put at least some money into these vehicles very early on.
I actually plan to fund a very small amount of college with these vehicles, because the money is so limited what you can spend it on. But early on all of our dollars are going into 529s and UGMAs (where they grow tax free in the early years since not a lot of earnings now).
There has been some tax planning talk of using ROTHs for college savings as well. That can get very complicated, but is an idea.
We actually prefer to save most college money in our name (& not earmarked specifically for college). But the idea of letting some money compound tax free for 18 years was kind of hard to pass up. It helps to know the money does not have to go to the kids. Though we are a "public school" family (we didn't spend much on college at all - no one in my family has) the kids have 4 cousins from very "private school" families. We figure odds are someone in the family can use the money. (& if it comes to that we can give them the money to avoid penalty, but have their parents reimburse us).
Anyway, I am not a big fan of 529s, but that is my take. Some parts are too good to pass up. Though I will not save six figures in these accounts, we may save up $10k-$20k before the kids hit grade school.
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