where i should invest to get tax benefit?

Question

I am having less salary and i want to save money so that i can take after 3yrs for my kids education and home.Any tax benefit plans like 401k.

Answer 1

First of all, take care of yourself!!!
A. Many parents worry about their children's education fund and under provide their own retirement fund.
B. You are having "LESS SALARY".
C. Something like fidelity's college investments prep for children would adversely effect your children's fafsa score.

OK. So you know the first step would be 401K. That's great. Second, you may want to invest into Roth IRA account. Why? If you really need to, you can use it for education without any tax consequence. Otherwise you keep it for yourself for retirement. Remember you may contribute $4000 for 2007 and $5000 for 2008. And finally Coverdell ESA (your education IRA) can be considered. 529 plan can be considered if your state give you state deduction.

You may want to do the budgeting again. I know it is pain in the behind....

Answer 2

If your timeline is only three years, you are probably better of just putting the money in a savings account or CD.

Roth IRAs are an OK way to save for education and/or a 1st time home purchase, but you need to leave the money in at least five years.

Answer 3

u can partake in soemthing like fidelity's college investments prep for children. if you invest now you can use stocks that are high level to make the most money. Once you need that money for your childrens college - you can still invest and use what ever $ is needed.