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In the financial press..

There has been more than a few articles written about whether to put your saving into your retirement account ( then take college loan from yourself for kids) or spread saving into separate accounts like the 524 for kids college funds. Has anyone heard of this or done any research on it? We decided to go the retirement route.


Asked by mrsljamieson at 1:12 AM on Jan. 2, 2011 in Money & Work

Level 19 (6,686 Credits)
This question is closed.
Answers (2)
  • We are doing both

    Answer by rkoloms at 8:13 AM on Jan. 2, 2011

  • I think it's almost always a bad idea to borrow from retirement especially if it's something that you know is coming up way before hand. If you don't pay that back you could get hit with a 10% fee, plus your tax rate.

    We are investing in our son's ESA which is nicknamed the Education IRA because it works almost exactly the same as a Roth IRA. Plus there are no penalties for using it to pay for college, and you don't have to pay it back.

    I agree with taking care of your own retirement first. But unless your in a higher income tax bracket I don't see why you wouldn't take advantage of an ESA or a 529. And even if you are in a higher bracket, you could always do the UGMA.

    Do invest their college funds though, don't leave them in a savings account.

    Answer by Erica_Smerica at 3:15 AM on Jan. 2, 2011