Ask:
I opened an Education IRA for both of my kids quite a while back and I deposit money into each of them monthly. My DH's grandother who passed away left a CD for each of the kids for $5000 each, my DS's has come due and I'm trying to decide what to do with it.
Should I send it into his Education IRA to purchase stocks, or open another CD with it? Either way the moeny will be used for college. I just can't figure out which way he will make the most money. I'm guessing the stocks, but I also hate to tie it all up in the same investment.
He has about 7 more years before he is ready to start college. What would you do?
Also: I'm curious as to what others have planned and are doing to save for college tuition, and about how much you think you will need to save for them to go to college, even if you plan on having them pay for a portion of it themselves. (Which I think is smart)
Thanks in Advance.
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We've been buying Series I Savings Bonds. We started with monies ds received for his baptism and now use birthday, Christmas, etc.
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I have nothing saved for my kids!!! They will deal with it when the time comes with financial aide and jobs. We will help where we can. That's how both my dh and I got through college.
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We just started saving for college about 3 years ago, for the younger 3 we have a 529 plan that our financial planner recommended, for our oldest DS we have some money in a seperate investment account that we hope will pay for his last 2 years of college, the first 2 years will be paid for with CD's and cash we have been putting in a savings account.
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Last year I opened 529 plans for my girls and we have a Upromise account.
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We have one of those prepaid college plans, honestly I am confused how the whole thing works. We are estimating 200,000.00 per child, not only tuition, but books and miscellaneous. Remember we are thinking out 16-18 years. Also not just 4 years, but grad school if our children want.
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We have 529 accounts for both our kiddos. If the money is in the kid's name then it will hurt the child for fiancial aid. However, the 529 is in my DH's name (however, it can only be used for higher education - college etc so it can be for either kiddo or DH or me if we decide to go back). This money is put aside after we have put money in for for retirement. The kiddos can borrow money for college; however, we need to be able to support ourselves (DH and me) in retirement.
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How about a low-risk mutual fund? That's what I'd do. The cd is a safe bet too, though, if you are worried about losing $.
When my mom died she left us some $, and we set up ds's (5) college fund with it, before he was even born. It is around $68K, I think, we add $50 to it every month and hope to add more to it when we get our equity line down.
How much will college cost when ds goes? Way much, I'm afraid, and I'm only talking a state school. We fully plan on having him contribute with summer jobs, etc. I don't want him to work during the school year, school and good grades 'are' his job. At least that's what I'm saying now.
However, I also don't want him to have to take out loans for college. I just think that is a lousy way to start off your adult life, with college loans. Yes, I know, so many people did it and were fine. That's true, and I've heard the reverse also. I listened to someone on NPR that took out huge loans, way over estimated what they would be earning, and come to find that after they graduated they in no way shape or form made as much as they were told they could expect, and are paying dearly on their college loans. And as the added kicker, they can't help their own kids so They are forced to take out loans and the cycle starts again.
College loans are not what they used to be. Now they are much higher interest, and a serious debt when you get done with school. I know this opinion won't be popular, but in today's day and age, when getting a job - not even a Really good job - just about any job - requires at least some college, we owe it to our kids to at least try to help them pay for college. I at least feel that way. I'm not going to do ds a disservice and pay for all of it, we couldn't afford that anyway, but he needs to know that we're not going to hand it to him on a silver platter. But to rely on loans alone, to me, (like my Inlaws did while they went out and got their dream house) really did Dh a disservice. Sorry off my soapbox now.
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We have a RRSP (Canadian) for our daughter, which we add to monthly, and also U.S. savings account, so she should be fine wherever she wants to go. Hopefully, it won't be Harvard, at $45,000 tuition per semester. The tuition there probably won't be going down for the next ten years, either.
Cheers, from
SwampWitch
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[quote=SwampWitch]Hopefully, it won't be Harvard, at $45,000 tuition per semester.
SwampWitch[/QUOTE
HOW can people afford this?? I'm all for higher education, but I'm wondering if a degree from here would really mean that much to prospective employers? I mean if you can afford that per semester, do you really even need a job?