Investing $6000 for child's education

[goodstarr]

Here's a question for you financial advisors. What is the best way to invest $6000 for a 7 year old's possible college fund?

 

[Jon99]

I would probably look at a 529 first...

 

[goodstarr]

Thanks. Could you please explain what a 529 is. I am clueless.

 

[floridaminnie]

Here's a link that's explain all of it.529 plan

 

[Jon99]

And just remember, you don't HAVE to choose the New Jersey 529 plan, though a lot of the individual states are making it more attractive to be in their home state..

For example, Illinois residents can now deduct contributions on their state tax return...

Just look around and see which programs meets your needs the best.. Also, check out the Education IRA's, though the big negative with those is that those monies count as an asset to the child, not the parent, thus hurting potential financial aid much more..

While we have most of our daughters money in the Illinois 529 program, we also put a little towards the old fashioned US Savings Bonds...

 

[floridaminnie]

I live in Florida and I'm currently doing the Florida Pre-paid college program for my daughter. There is different stuff all around.

 

[aprilgail2]

Originally posted by Jon99
For example, Illinois residents can now deduct contributions on their state tax return...

I have my daughters college fund with the NYS college savings plan and it is also tax deductable from my state taxes..helps me al ot with the state tax by claiming all I put in there over the year.

 

[jel0511]

Unforunately, NJ doesn't have a tax deductibality for any money contributed to a 529 Plan. We have our money in Fidelity's 529 plan (based out of NH). We've had no problems with them and used them mainly because we also have our brokerage account with them.

 

[goodstarr]

Thanks everyone for the information. We'll check out the plans.

 

[clh2]

Our financial adviser recommended NOT doing a 529 plan. In our case - he absolutely recommend putting the money in a Roth IRA. (DH and I are maxxing out on our respective 401K's and 403B's at work).

I believe the main reason was - is we will continue to control the money forever, plus after 5 years - withdrawals can be from the Roth for educational reasons. I know there are lots of rules with withdrawals from the Roth's however, I cna't think of 1 at the moment other than the 5 year.

I also think that the government rules that apply to the 529 plans expire before our DD, 9 1/2 will be in college. While it would make sense that congress would continue these plans, it is hard to predict what congress will several years down the road.

 

[disneygeek]

Put 2000 in an Educational Savings account for 2003. do an additional 2000 for 2004. You have more chooses in these plans. I would use a firm like Edward Jones to help manage. / allocate these funds. they will then advise to put the remaining in for 2005. We took our daugter to edward Johes for th first time when she was 7 days old. Ours should be set to attend Auburn University.

Good luck.