Roth IRA or 529 Plan for college savings

[robby]

Which vehicle do your think is better for saving money for a child for their college expenses? Should we use our Roth IRA to save the money or use a 529 plan?

[Tree0164]

Re: Roth IRA or 529 Plan for college savings

Fund your own retirement first whether that is 401k, IRA or Roth IRA.

I wouldn't use a Roth IRA for college. You can only take out the contributions, not any of your earnings before 59 1/2.

Put the college saving money into a 529. I do that for my 3 boys. Just a small amount until I can comfortably save for retirement- all debt paid off, plus saving 20% of income for retirement. Remember they can take loans for college but you can't loans for retirement.

[Bluezy]

Re: Roth IRA or 529 Plan for college savings

I agree. 529's are perfect vehicles to help out with college expenses...but also remember that a child should contribute to his college tuition. He/she will appreciate the education much more by working towards it.

[jmjj215]

Re: Roth IRA or 529 Plan for college savings

What about the ESAs? I hear those are superior to 529s b/c of the increased flexibility (if you qualify for the ESA)

[Roger]

Re: Roth IRA or 529 Plan for college savings

I think it depends on where your child will go to school. Most 529's are state specific and moving the account from one state to the next can be problematic. If you are sure where your child will go to school (i.e. alum), use the 529. Otherwise, I like the Roth.
Roger

[Tree0164]

Re: Roth IRA or 529 Plan for college savings

You can use 529 for any college.