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FWIW I provided a ROTH to my daughter but matched her contributions on a one-to-one basis. She got into the habit of saving and was immediately rewarded.

She/you can also use that for college. Read the last paragraph about the potential impact on financial aid.

Roth IRA. Another option is to have your student make contributions to a Roth IRA instead of the parent saving in a 529 Plan. In order to be eligible to contribute to a Roth IRA, your student must have earned income equal to or more than the amount of the contribution (Note: dividends and interest income don’t count as earned income). Money in a Roth IRA can be invested in much the same way you can invest in a 529 plan, and the availability of investment options is dictated by the financial company that provides the Roth IRA account.

One good thing about a Roth IRA is that contributions can be taken out before the earnings. In addition, the contributions portion can be used for any purpose, including education, without tax or penalty.

But I’ve always said that a Roth IRA is a much better retirement vehicle than a college-savings vehicle. Earnings on a Roth can be distributed tax-free after the account owner reaches age 59½, as long as the money has been in the Roth IRA for at least five years. But earnings that come out before age 59½ are taxable even when used for college expenses (however, the 10-percent early distribution penalty may be waived under the special exception for higher-education expenses.)

The surprise for many parents is the potential financial-aid penalty of using a Roth IRA: The entire IRA distribution, taxable or not, must be included in base-year income on the student’s federal financial-aid application for the following year. This can reduce the amount of need-based financial aid.

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