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You have not screwed up the logic. The Roth IRA can be a good way to fund education.

And you don't have to pay tax on the contributions to the IRA, just on the earnings.

A good plan is for both you and your spouse to contribute $2000 per year to a Roth IRA. Potentially this can add up to $72,000 in contributions if done from birth of the child. Take the contributions out tax free at college time and leave the earnings in the Roth IRA for retirement.
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