Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: ER with Kids/College Money
Old 12-14-2004, 12:22 PM   #21
Recycles dryer sheets
newellcr's Avatar
 
Join Date: Aug 2003
Posts: 187
Re: ER with Kids/College Money

Hello Nords,

I'm working on the 18 year horizon for each kid. It should mean about 50k (current year dollars) tax free for each of my kids. Plus I don't pay state tax on the contributions. (That's a couple of years worth of investment expenses.) You make a really good point about the cap gains tax break. I am also working on an outdated rule of thumb that after about 7 years, a tax deferred investment (with 10% penalty) will outperform a non-tax deferred investment for the same period.

Great points about good and bad labels and running the numbers for each case.

Kind Regards,

Chris
__________________

__________________
newellcr is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: ER with Kids/College Money
Old 12-14-2004, 03:29 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Re: ER with Kids/College Money

Quote:
I am a flower gardener. *I am planning on becoming a master gardener and would like to take some university classes in horticulture, plant taxonomy and plant diversity. *Exciting I know. *
Actually, while it may not be exciting, it is very satisfying. I took a course on plant propagation, and learned a lot about rooting cuttings, etc., and I enjoyed doing it for many years.

It is a little lonely for me now, but in other circumstances I would like to do it again.

Mikey
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Re: ER with Kids/College Money
Old 12-15-2004, 11:10 AM   #23
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: ER with Kids/College Money

Hey Mikey, you play drums, salsa dance, tell great stories and have an interesting perspective on investments. You shouldn't be lonely for long.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: ER with Kids/College Money
Old 12-15-2004, 11:32 AM   #24
Thinks s/he gets paid by the post
 
Join Date: Jun 2004
Location: No. California
Posts: 1,601
Re: ER with Kids/College Money

Martha,
I've been through the Master Gardener program once and will start in January for the second time. I highly recommend it. For my first time, I was unable to complete my volunteer hours and dropped from the program. This time I plan on doing extra volunteering.....I have much more free time these days even though I'm still working.

Let me know if you need the link to your state's program or have any questions.
__________________
KB is online now   Reply With Quote
Re: ER with Kids/College Money
Old 12-15-2004, 04:59 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Re: ER with Kids/College Money

Quote:
Hey Mikey, you play drums, salsa dance, tell great stories and have an interesting perspective on investments. *You shouldn't be lonely for long.
Martha, thank you for a very sweet comment

Mikey
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Re: ER with Kids/College Money
Old 12-15-2004, 06:26 PM   #26
Thinks s/he gets paid by the post
charlie's Avatar
 
Join Date: Mar 2004
Location: Dallas
Posts: 1,211
Re: ER with Kids/College Money

I checked the gov web site and confirmed that
I-bonds/EE bonds must be held in the parent's
name (not the child) to be exempt from tax if
used for education. Sorry I misrepresented that
in an earlier post.

Cheers,

Charlie
__________________
charlie is offline   Reply With Quote
Re: ER with Kids/College Money
Old 01-17-2005, 03:34 PM   #27
Recycles dryer sheets
 
Join Date: Jan 2005
Posts: 487
Re: ER with Kids/College Money

I have college to pay for in 5 yrs and was also looking at the 529 plans. Did anyone else notice the glaring 10% penalty loophole or am I imagining this......

You make your child the beneficiary and (for my state) the maximum contribution is $239,000. If a person reached the max. chances are pretty good that there would be money left over so...... you change your beneficiary to another member of your immediate family......say your elderly parent who can then take a computer class, gardening, a foreign language, etc. and I'll quote from the 529 program description, "If the beneficiary dies or becomes disabled, you may cancel your Participant Agreement and receive the full balance of the account. The earnings portion of the distribution will be subject to federal income tax, but not the 10% penalty." And I assume from the ommission it would also be exempt from state tax.


__________________

__________________
tinlizzy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Money we've made versus money we have kept laurence FIRE and Money 27 07-14-2006 10:44 AM
Time vs. Money Mountain_Mike Other topics 40 10-23-2005 09:28 PM
How long will money last? Money Mag earlyout FIRE and Money 21 10-29-2003 03:15 PM
Money market in 401K Bill FIRE and Money 2 05-31-2003 08:15 AM

 

 
All times are GMT -6. The time now is 11:37 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.