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    Thread: Account for New Born

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    1. Member crazysimi's Avatar
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      08-29-2012 04:48 PM #1
      We are having a baby end of October and my parents and others asked if we have an account set up so they can give money, assuming college. They would like something like a 529 plan so they can get the tax write offs, but is there other type of accounts I can open for her that they can still add yearly and get the benifits. Only reason I'm hesistant on the 529 is what if she doesn't want to go to college and you lose 10% right off the bat

    2. Member jnm2.0t's Avatar
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      08-29-2012 04:53 PM #2
      Question: are you fully prepared in all other aspects of your financial life - retirement being fully funded, all proper insurances in place, emergency fund fully funded, no debt, etc.? If the answer is no then skip the 529.
      I'm just a regular Joe, with a regular job. I'm your average white, suburbanite slob.

      You could not pay me enough to own another Ford or another hybrid ever again. http://badges.fuelly.com/images/sig-us/203834.png

    3. Member crazysimi's Avatar
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      08-29-2012 04:58 PM #3
      I have retirement fully funded and all insurances in place, small debt, but I'm not opening this account for me to be putting money in, This would be only for grandparents to contribute to and want the tax benifits of that

    4. Member jnm2.0t's Avatar
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      08-29-2012 05:08 PM #4
      Quote Originally Posted by crazysimi View Post
      They would like something like a 529 plan so they can get the tax write offs
      Quote Originally Posted by crazysimi View Post
      This would be only for grandparents to contribute to and want the tax benifits of that
      There is no federal tax write off on contributions, states vary. WI gives you up to $3k of deductions from what I see poking around online, at your top tax bracket thats $202 tax savings. If they are out of state I don't know if they could claim it. $200 doesn't seem like a reason to specifically want a 529.
      I'm just a regular Joe, with a regular job. I'm your average white, suburbanite slob.

      You could not pay me enough to own another Ford or another hybrid ever again. http://badges.fuelly.com/images/sig-us/203834.png

    5. Member crazysimi's Avatar
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      08-29-2012 05:13 PM #5
      yes they are in wi too, they do this for all the grand kids, so 3k x5 a year it would be, I'm just looking if there is any other types of accounts like this that I could set up that isn't so tied down with restrictions and their happy with their write off

    6. Member eluwak's Avatar
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      08-29-2012 05:23 PM #6
      We just setup a savings account for each at our CU. I'm sure we could get a better return doing a million other things, but we like the ability to access it unrestricted if needed. We chuck $10/week into each and if anyone sends them money as a gift they have to put half in there before they spend any.
      <insert comment here>

    7. Member jnm2.0t's Avatar
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      08-29-2012 05:37 PM #7
      Quote Originally Posted by crazysimi View Post
      yes they are in wi too, they do this for all the grand kids, so 3k x5 a year it would be, I'm just looking if there is any other types of accounts like this that I could set up that isn't so tied down with restrictions and their happy with their write off
      The tie down is what gives you the tax shelter on annual growth which is more important, that also comes with the penalties and taxes on growth if not used for the intended purpose though which can be significant. If you want the freedom of using the money as needed and investing in whatever you want, not just the 11 options in your 529, then don't use a 529 but you also won't get the tax advantages.
      I'm just a regular Joe, with a regular job. I'm your average white, suburbanite slob.

      You could not pay me enough to own another Ford or another hybrid ever again. http://badges.fuelly.com/images/sig-us/203834.png

    8. 08-31-2012 12:01 AM #8
      Fund it and the kids will go to college.
      Last edited by TT for me; 08-31-2012 at 12:05 AM.

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      08-29-2012 06:33 PM #9
      Quote Originally Posted by crazysimi View Post
      We are having a baby end of October and my parents and others asked if we have an account set up so they can give money, assuming college. They would like something like a 529 plan so they can get the tax write offs, but is there other type of accounts I can open for her that they can still add yearly and get the benifits. Only reason I'm hesistant on the 529 is what if she doesn't want to go to college and you lose 10% right off the bat
      I'm in the camp that says make your kids earn for that 100% scholarship. What good is a 529 plan when all kids do today is smoke pot on campus.

    10. Member blue70beetle's Avatar
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      10-06-2012 02:20 AM #10
      If you raise your kid(s) with the underlying assumption that they are going to college, it's unlikely that they would decide not to go. In 18 years there isn't going to be a significant pool of reasonably good jobs that don't require at least some type of degree anyway, so unless there are extenuating circumstances that prevent it (such as a severe learning disability or mental handicap), there isn't really any reason not to steer them towards college.

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