Serious question about Investing for College

[sq764]

I'll make it short and sweet.. I am looking for thoughts/ideas...

I want to try to save $50K for our baby that is due in Dec for college.. I figure i have 17 years to do so.

I have some ideas that I am pondering, but was curious of any other thoughts..

2 things:

1) We want to start it now, so we should have most of the 17 years to save..

2) I am not sure how much each pay we are planning on investing, so there is no definite amount to bank on.

Thanks in advance for any thoughts..

[JustMissed]

$160 a month contributed to a 5% investment will give you $51,283.92 in 17 years.

This is without any income tax consideration.

JM

[sq764]

wow, when you put that in perspective, that is nothing..

[JustMissed]

If you are a young man, you and your wife would only have to save and invest 10% of your pay and you will be able to retire a millionaire or possibly a mult-millionaire.

JM

[IRISHLADSTABLE]

It's possible to significantly reduce or even eliminate the need for college loans. The difference between investing now and borrowing later could mean tens of thousands of dollars to you - and your child.


529 Plan

It's similar to a 401(k) plan, but the goal is to save for college instead of retirement.**

529 Advantages

• Federal income tax-deferred growth
• Additional state tax advantages in certain states
• Tax-free qualified withdrawals***
• Special estate and gift tax exclusions
• Professional investment management
• Accounts can be transferred between family members

Hope this Helps

Jimmy

[Dave Schwartz]

SQ,

Very admirable goal.

As I recall, this is what Irish Lad does.

If I were you (heck, maybe I should do it anyway <G>), I would contact him directly for a consult.

The bad news is that $50k will probably hardly put a dent in it 17 years into the future.


Regards,
Dave Schwartz

[sq764]

Well, I look at $50K like this.. It's likely 2 years of college and spending money covered..

I will do what my parents did with me... You pay for half of college, I pay for the other half.. Best thing they ever did for me.

Even thought I will be paying for my college for 7 more years, I probably wouldn't hve finished without the burden of paying for it..

[dav4463]

Take the $160 per month.....PLAY SUPERFECTAS EXCLUSIVELY !! Only go for the big payoffs....you should hit a few big ones in 17 years !

[kenwoodallpromos]

Besides saving, look onlinr as to what major organizations give good sholarships and join and have your child joion a few- like 4H, ethnic clubs, veterans' orgs, civic orgs, etc. NTRA evben has a scholarship!
There may be a tax exempt 4-1K type fund for college.
If you buy the baby life insurance at birth, some may be able to be withdrawn at college age.
Get the child into a sport that has lots of scholarships.

[hurrikane]

sql,

I have 2 in college now.

50k may not do it 18 yrs from now. Probably be better to put away 320. if 50k does it..you have 50 k to take a vacation on.

Also if you have anouther down the road..expenses go up and it may get tough to put that away for the second. If so you've got a head start on things.

Just an idea...

[IRISHLADSTABLE]

Scott,
You reside in Delaware correct ? All amounts are per yr


Private

4 yr with room & board $29,511

4 yr without room & board $22,397

2 yr with room & board $19,550

2 yr without room & board $14,050

Public

4 yr with room & board ( In State) $13,833

4 yr with out room & board ( In State )$7,891

4 yr with room & board ( Out Of State) $20,879

4 yr with out room & board ( Out Of State) $14,937

2 yr with no room & board ( In State ) $4,900

2 yr with no room & board ( Out Of State) $8,867

Jimmy

[sq764]

Thanks IL..

Of course my child will do what I did and want to get out of Delaware for college.. I could have gone to Delaware for about $19,000 for 4 years.. Instead I chose to go to a private college in Maryland for $58K over 4 years...

(MY parents were thrilled with that decision)

[Storm Cadet]

The above calc for college are correct for 2004. College tuition rates are rising quick...4% per year with the fastest prices going up at the state institutions.

I paid one semester of my daughter at an away state school. Paid $12,000 for the 1 friggin semester (know how many yearlings shares that I could have had???) she's home now attending an IN state school. I paid for 1 semester what I had to pay for 1 class before.

Try looking for a job for either you or your spouse working at a college. The savings for you will more than reward you in the long run. Many colleges pay 10% less than the public sector but the educational benefits far outweight the 10%. Most colleges have a tuition remission program for their employees (either full or half)Both of my boys want to go where I work, and that'll save me almost $300,000...and it's tax free benefit too. You do not have to pay Fed or State tax on the education part of the benefits.

Also, many schools are in a tuition remission program with other colleges where they have reciprocal agreements to waive tuition in case they don't want to attend where you work.