College / Savings Plan

doublej3164life

Long-time lurker, first time poster here.  I have a 4 month old.

I am wondering if anyone here has any kind of savings plan for their young child or know people who found a good long-term one,  The Gerber life insurance/college savings plan looked good, but I don't see where the gimmick is.  I can get a cash payout when the kid turns 18 that is more than what I will have to put into it?  I am wondering what everyone has done or researched.

Wulfgar

I would avoid using any type of life insurance/ college savings plan since usually the pay out will be lower then if you invested it properly in a 529 plan.  My work allowed me to add a dependent rider on to my life insurance for like $5 a month.

We are thinking once we get more of our debt paid off and our retirement more in line to start something for our LO.  I agree with most of the financial experts that funding a retirement plan first makes more sense because of the variety of ways to pay for college.  Also by the time that my LO will be going to college I will be too close to retirement not to plan for retirement first.

If I was in my 20's instead of my early 40's I might think differently but I am also planning to put my son into Catholic school for at least through the 8th grade if not through High School so I can use that money to assist in college.

doublej3164life

Right now I am leaning towards setting up automatic payments on a long-term mutual fund account and just planning on remembering it's for the child and not me.  The 529 plans and Coverdell are good, but I don't like the idea that it absolutely has to be used for educational expenses.  Custodial accounts don't seem worthwhile at all.

Wulfgar

I am happy with my company, depending on how well we do for the year depends what the match is up to 100%.  The first two years that I have worked there the matches have been 90% and higher on the first 6%.  That is helping me catch back up again.  My wife has a Roth IRA that we can use to help pay for our LO's college if needed.

Eapy

Also something to consider is it may not be the best to put the assets in the child's name. When colleges look at you to see if they will grant financial aid about 30% of the child's assets are considered eligible to be used but only 6 or 7% of the parents. Sometimes best to just earmark the accounts for the kids.