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 Crasher
Join, or die.
Registered: 03/13/01
Posts: 2,773
Loc: INTP
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 529 vs. Coverdell
#8541327 - 06/19/08 04:22 PM (3 months, 17 days ago) |
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For a college savings plan.
They're both considered assets of the parents, which I'm sure my children will appreciate if they need financial aide. The main differences seems to be the amount you can deposit and what you can spend it on.
Thoughts, experiences,snide remarks?
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Chemy said:
Wal Mart has a sale on aluminum foil, 50% off if you buy 10 cases, maybe that's a scam and the foil is impregnated with MKULTRA chemicals though, OMG NOOOO!
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Veritas
Registered: 04/15/05
Posts: 9,721
Loc: PNW
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Re: 529 vs. Coverdell [Re: Crasher]
#8543853 - 06/20/08 10:00 AM (3 months, 16 days ago) |
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Here's some info about both types of college savings plans:
http://www.savingforcollege.com/intro_to_esas/
http://www.savingforcollege.com/college_savings_201/
A Coverdell is a savings account, and cannot include investments. A 529 plan may include both cash and investments, so the risks and returns may be higher than a CSA.
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 GnosticWarrior
Hermit
Registered: 03/11/07
Posts: 189
Loc: Oahu, Hawaii
Last seen: 2 hours, 55 minutes
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Re: 529 vs. Coverdell [Re: Veritas]
#8546072 - 06/20/08 11:59 PM (3 months, 15 days ago) |
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I look at a 529 as similar to a 401K, most have a limited menu of investment options usually mutual fund based.
A Coverdell is more similar to a Roth IRA. You can invest in a wider array of investment options.
I think the main thing should be how much would be contributed to the college savings fund and by whom. Maybe its better for a parent to focus on their own Roth IRA contributions and gift the college expenses for their children. Depends on age factors too though.
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HighTek
A FunkyPhoenician
Registered: 03/22/07
Posts: 798
Loc: In your pants.
Last seen: 2 hours, 36 minutes
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Since a 529 is considered assets of the parents, will they be screwed (tax-wise) if I start one for myself???
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Veritas
Registered: 04/15/05
Posts: 9,721
Loc: PNW
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Re: 529 vs. Coverdell [Re: HighTek]
#8636974 - 07/15/08 09:09 AM (2 months, 22 days ago) |
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It's only considered their asset if THEY own the account for benefit of their child. If you start your own 529, they will have no connection to the account.
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