Is it better to put away money into my IRA or put money into a 529?

Answer 1

If you have children and plan to pay for their college (which you shouldn't they should try for scholarships; your retirement comes first!!!!!!!!) then the 529 is better, but check into them very carefully..............if you want to plan for your retirement (which should come before their college, again - scholarships, anyone??) then an IRA is best; just be sure to diversify, diversify, diversify; go into large cap, small cap, and medium cap stock funds, as well as short term bond funds, and make SURE you get some International funds as well; NOT GLOBAL funds; they will duplicate what you may already have, but international funds........I threw a lot at you, but do your homework; the internet has many great sites for you to learn from, and , you may also want to consider going to a financial advisor!!!!!!! best money you'll ever spend........did I say your kids should try for scholarships?

Answer 2

I am assuming that you want to know which account is more advantageous for saving for college expenses. I'm also assuming you already have all of your personal financial goals well in hand before you are planning to pay for your child's college expenses. The best gift you can give your child is taking care of yourself so they don't have to when you're old and broke!

That said, the IRA might be better because you can use the money you save for other things (like your own retirement!) if your child ends up with a shcolarship/grant or if he/she decides to go to a cheaper school. I'm not sure what happens to 529 money if you don't end up needing all of it for school...I'm guessing you have to pay taxes on what's left--and I'm not sure if the leftover money would actually belong to you or your child.

But the 529 can offer unique state tax deductions as well, depending on what state you live it, so it may come out better in the end. Personally I'd stick to the IRA though, since you have more investment choices and discretion with the money. And you can always change your mind later regarding what to do with it.

PS- the Utah 529 is best if you decide to go with a 529 but your state's plan doesn't offer special state tax deductions.

Answer 3

In terms of what?

Theoretically, money into an IRA is for your retirement. Money towards a 529 plan is for someone's college expenses.

That said, there are ways to use IRA money for educational purposes without penalty. I'm not savvy enough to think about using my retirement money to put my kids through college in a decade, nor do I have enough insight to know if/when Congress might want to take that option away in the future, but you might want to consider that.

My best answer: why not both? Hedge your bets, so to speak, so at least your options are many when you need them.

Answer 4

Put it in IRA, your children can work for there education.
If you are going to retire when they enter college, by then if they really need your money, you can take it out of your IRA and just pay some tax. It's not that much, only upto 15%.
The children can earn a scholarship or get a job and go to school at night.
It's better to keep your children business and gain work experience than just studying.
Good Luck!

Answer 5

All prior answers look OK that said
You and your kids can borrow for their education. I don't think many in any will lend you money for your retirement, especially later when you need it.