Saving for son's college using Roth instead of 529 or coverdell.?

Question

I will be 60 when son starts college. Instead of 529, which must be used for college, I am thinking about opening a Roth IRA account and contribute to it with the intention of using the money for my son's college. I am thinking that since both 529 and Roth are not tax deductible, and both are non-taxable when withdrawn, they are equivalent with one exception. If my son does not go to college, I would not be able to withdraw the money tax free or without penalty from a 529. Not an issue with Roth since I will be more than 59 1/2 by than. One more thing: which account counts more towards grants and scholarship eligibilities?
THanks

Answer 1

As a professional tax preparer, I can advise you on the taxable parts. You are correct about the limits of the 529. If you have more than one child, a 529 in one child's name will not have an effect on the grant eligibility of another child. If you only have one child, then there will be no real difference between whether the money is in your name or your child's name. If your son works, money can also be put into a Roth IRA in his name up to the amount he earns. This includes earning an allowance for chores around the house. Then, he could use that money for any reason later as long as he doesn't withdraw the earnings until he is 59 1/2. To determine which one is really right for your family, you should speak with a certified financial advisor. Feel free to contact me privately if you'd like a recommendation for a good advisor.