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Financial Planning / Paying For College


Subject:  Re: College Investment Strategy?? Date:  11/10/2001  5:39 AM
Author:  ibforms Number:  4515 of 8500

>At 55-1/2, I've just received $150K that I've put in a mm while I decide how to invest it. I've no loans (house, consumer debt, nada) and have maxed out on IRA and SEP-IRA. We've already put the last child's college costs aside (he's a HS senior), though an older child may want to do grad school.

>As our income in <$30K, we'd expected to qualify for financial aid, BUT that $150K will be counted as an asset to be included in the formula for "expected family contribution" UNLESS it's in an approved retirement vehicle.

1. Keep $25K liquid against older child's potential first year attendance at grad school;

How about the older child becoming an employee instead of being your dependent? If you are part of a SEP-IRA, you are probably in charge of the compensation of employees, right? Starting in 2002, up to $5,250 for grad school can be a non-taxable employee tuition benefit.

How about the remaining $20k for the first year going to a 529 plan? When qualified distributions come out, they won't be taxable to the older child.
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