US College versus UK University
#17
Re: US College versus UK University
It really is too late and 529 plans are rubbish, IMO.
1. They mainly come with limited investment choices and high management fees.
2. They immediately reduce your eligibility for financial aid.
We're using a Roth IRA as an instrument to save for our youngest's college education and it has numerous advantages over a 529. However, you would need to evaluate this carefully in the context of your specific situation since there are a lot of issues and variables to consider.
1. They mainly come with limited investment choices and high management fees.
2. They immediately reduce your eligibility for financial aid.
We're using a Roth IRA as an instrument to save for our youngest's college education and it has numerous advantages over a 529. However, you would need to evaluate this carefully in the context of your specific situation since there are a lot of issues and variables to consider.
#18
Re: US College versus UK University
I find your idea interesting. I was thinking of doing the same thing, but financial planners and the State keep stuffing 529 down my throat. From what I have read a roth IRA is much more flexible, you just don't save the tax going in. However I believe the is no tax to pay when you take it out and can be used to buy first house, education and retirement.
#19
Re: US College versus UK University
And then to add to the anxiety about being able to save for kids college, investments in the plans can be volatile.
#20
Re: US College versus UK University
I find your idea interesting. I was thinking of doing the same thing, but financial planners and the State keep stuffing 529 down my throat. From what I have read a roth IRA is much more flexible, you just don't save the tax going in. However I believe the is no tax to pay when you take it out and can be used to buy first house, education and retirement.
We actually have one for each of our kids, even though there is no income tax in Texas. A Roth IRA is not an alternative for us because we are already using that using that for retirement (strictly this is a backdoor Roth, as our income is too high to contribute to a Roth).
That said, the eligibility for financial aid is a concern.
#21
Re: US College versus UK University
means tested financial aid is for people who really are poor. I'm talking parents working 2 jobs and the kid with a job. You'll fill out the FAFSA form thinking that it's a complete waste of time for anyone approaching a middle class lifestyle.
However, most colleges use the FAFSA for their own financial assessments and so it can be useful. In our experience, money is given out to bright poor kids first and then to above average clever, richer kids next. The college is still your best bet for any financial help if your kids are clever. If they want your kid then you can most certainly bargain with a couple of colleges over money.
However, most colleges use the FAFSA for their own financial assessments and so it can be useful. In our experience, money is given out to bright poor kids first and then to above average clever, richer kids next. The college is still your best bet for any financial help if your kids are clever. If they want your kid then you can most certainly bargain with a couple of colleges over money.
#22
Forum Regular
Joined: Jun 2015
Location: Washington, DC
Posts: 64
Re: US College versus UK University
But not everyone likes the focused approach - it's just a case of finding what works for the individual student (some friends had no idea what they wanted to do!)