Tweet
My dd has a little over 1,000 in her utma account should I transfer funds to a esa now or wait? My plan is to keep the utma open. She 3 years old. I haven't started in vesting in her college yet and really would like to start.
-
-
My kids have both UTMA and ESA accounts. I would leave that $1000 there for now, since it most likely isn't causing a tax issue. Just begin investing for college in the ESA. I believe the limit is $2000 per year.My other blog is Your Organized Friend. -
I personally would not begin investing in a ESA. Most of the useful provisions will expire in 2011. The ESA is dying a slow death.
So I would ask - why not invest in a 529 instead?
I personally invest in UTMAs for my kids at this point, because it's cheaper, the money is not restricted, and we pay no taxes on it at this point. 529s will be my choice when we hit higher tax brackets, need more tax sheltered savings vehicles, or when the UTMAs start hitting taxable territory.
UTMAs are frowned upon as far as financial aid considerations. I doubt my kids will qualify for financial aid, so it's pretty moot for me. Just a few thoughts off the top of my head. (Plus you can always convert a UTMA into a 529 to get around these issues).Comment
Comment