Roth vs. ESA

[ifonlyIknew]

I can only afford to put 200/month into my Roth IRA (Fidelity), but I've also been putting away 100/month total of my two children-ages 2 and 5 into an educational IRA, where the stock/bond ratio becomes more conservative as they approach age 18. This plan is through T. Rowe Price.


I'm considering stopping all contributions to the kids funds and try to max out my own Roth. I'm already contributing up to the employer match in my 403b.

or

changing the kids fund to an ESA (which would allow me to use funds for elementary/high school vs. only college and beyond.) I think you can contribute 2000/year max. Rational-- my kids attend private school now and will continue to do so. I'm an educator at a university, so as long as I'm teaching, my kids will be eligible for free college tuition. Unfortunately, I have to pay for their elementary/high school on my own, although that tuition is subsidized at $400/month. But I'm still paying $800/month out of pocket. Downside is I still wouldn't be maxing out my Roth IRA.

Any thoughts?

[fruitbowlk]

The rule of thumb is Retirement before kids college fund.

[maat55]

When private school becomes a huge sacrifice, I question it's worthyness. Where you live and the availability of good public schools can be a factor, I still think that public schooling with good parent oversite is effective.

You need to decide whether 800.00 per month could be better used. With that said, IMO, retirement should not suffer. 10% to 15% should be invested first, then 529's or ESA's.

We moved to a suburb just for the good public schools and have never regreted it. I must add, that I live in Oklahoma (The Bible Belt). Most of our teachers are like minded.

[disneysteve]

Retirement comes first. Your kids can always find ways to finance college through grants, loans and work but there is no financial aid for retirement. If you feel you are not investing enough for retirement (which it sounds like you are saying), that should be your first priority.