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|Subject: Re: education investing with AGI over 150K||Date: 10/30/2000 4:12 PM|
|Author: TMF2Putt||Number: 25861 of 81987|
We have just had our first child and want to start a fund for his education. I'm finding most accounts have a income limit to qualify. We're concidering opening an account with a discount brokerage and starting a plan that way. Is this the best way to save for his education or are there better ways.
You might take a look at the info on Education IRAs. Although you and your wife are probably above the income limits (no contributions if AGI is above $160K), it is permissable for you to gift the money to your child who may then open his own Education IRA. Max contribution is $500 per year. See the excerpts from the Education IRA info below ...
Any individual may contribute a maximum of $500 a year to an education IRA for the benefit of any person under age 18.
But you should note that, unlike other IRAs, a person can make a contribution to an education IRA even if that person has no compensation income for that tax year. This being the case, there is no reason that Grandpa can't give a $500 gift to little Johnny. Johnny can then turn around and open his OWN education IRA account for the full $500, since Johnny is well under the income limitations.
I'm no expert, so there may be other options available to you as well. Fools, other options?
A couple of other boards that may be helpful are ..
Paying for College ..
Family Fool ...
Good luck with your investing,
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