Money Investing megathread extravaganza - Page 462

**DaFace** · 06:35 PM

A place to talk about investing stuff.

**Rain Man** · 01-31-2021, 02:14 AM

Quote:

Originally Posted by Buehler445

So my kids (3 and 7) are getting some reasonable amounts of cash built up in their savings accounts. Not huge money, but I'm a total chode and haven't bought them any toys with a single cent that anyone has given them for baptism, birthday, Christmas, whatever.

So it's currently in a savings account earning dickall. I'm fairly strong in getting it into some kind of investment account, question is to what?

I know the trendy thing to do is a 529 plan, but there is a real discussion to be had about the future of college and my kids opportunities there. Unless something changes, probably structurally, I think there are very real chances my kids won't go. As a guy with a graduate degree, I hope they do, but it isn't in their best interest to go blow 100K on something they're not going to get a return on. Nonetheless, some flexibility might be a little better.

A standard investment account might be prudent, and probably what's going to happen, but if they indeed use it for college, paying, you know...TAX when they're in their second semester isn't appealing.

I tossed it to the wife that maybe we should start a Roth for the kids, even if they don't put any more in it until after college, they should have serious gains and a hell of a head start. She wasn't thrilled about the idea, thinking they couldn't get it out if they needed it. After 5 years they should be able to borrow the basis. Plus, I think there is some value in the fact there are barriers to exit. If my kids suck (hey, my sister exists), and I can't pass on anything, they'll still have something come retirement.

Anybody have any thoughts on this?

It looks like Kansas' 529 plan may have limited uses, but you can start a 529 plan in Colorado's CollegeInvest program even if you don't live here, and it can be used for all sorts of skill training other than college. Per Colorado's site:

https://www.collegeinvest.org/529-sa...n-flexibility/

Our savings plans aren’t limited to just colleges or universities or graduate programs. Particularly in these times.

Your CollegeInvest account can be used at community colleges or trade schools, two-year nursing or medical technician programs, or a two-year online program on Entrepreneurship and Small Business Management. Even qualified special interest programs such as art schools, hair stylist and barber schools, chef or culinary schools, master plumber programs, and more.

How about a marine biology program in the Caribbean? Or a PGA qualifying school in Florida or Arizona?

Did we get your attention?

You don’t have to live in Colorado to open a CollegeInvest account. Nor does your child or student have to go to school in Colorado. Your savings can be used at an eligible school anywhere in country, and even some internationally.

“Eligible” means that the school participates in the federal loan program.

However, I don't know if you would reap state tax advantages or not. They talk on the site about saving on Colorado state taxes, but don't mention what happens if you don't file your state taxes in Colorado. You'd have to check on that.

https://www.collegeinvest.org/529-sa...ax-advantages/

**Buehler445** · 01-31-2021, 02:42 AM

Great stuff. Thanks Rain.

**DaKCMan AP** · 01-31-2021, 06:29 AM

Quote:

Originally Posted by Buehler445

I tossed it to the wife that maybe we should start a Roth for the kids

Anybody have any thoughts on this?

Your 3 and 7 year old have earned income?

**DaFace** · 01-31-2021, 08:14 AM

Quote:

Originally Posted by Buehler445

Great stuff. Thanks Rain.

I could be wrong, but I THINK that's true of 529s broadly, so dig into Kansas's program as well. If so, you'll almost certainly be better off taking advantage of the state tax savings.

FAH-Q · 01-31-2021, 08:31 AM

Quote:

Originally Posted by Buehler445

So my kids (3 and 7) are getting some reasonable amounts of cash built up in their savings accounts.

I tossed it to the wife that maybe we should start a Roth for the kids, even if they don't put any more in it until after college, they should have serious gains and a hell of a head start. She wasn't thrilled about the idea, thinking they couldn't get it out if they needed it. After 5 years they should be able to borrow the basis. Plus, I think there is some value in the fact there are barriers to exit. If my kids suck (hey, my sister exists), and I can't pass on anything, they'll still have something come retirement.

Anybody have any thoughts on this?

You cannot start a Roth for your kids unless they have earned employment income, so that’s out at their age. 529 plans are intriguing assuming they are utilized for educational purposes. I like the idea of doing a taxable brokerage account for them and allowing them the flexibility to work with you in selecting their investments, etc. You can use that as a good way to educate them on selecting tax favorable investments since it is a brokerage account as opposed to a Roth or Traditional IRA or 529 plan.

**Buehler445** · 01-31-2021, 09:17 AM

Quote:

Originally Posted by DaKCMan AP

Your 3 and 7 year old have earned income?

****. Forgot about that rule.

**Buehler445** · 01-31-2021, 09:18 AM

Quote:

Originally Posted by DaFace

I could be wrong, but I THINK that's true of 529s broadly, so dig into Kansas's program as well. If so, you'll almost certainly be better off taking advantage of the state tax savings.

I’ll look but I don’t think so. Because Kansas.

philfree · 01-31-2021, 09:19 AM

When my dad passed away 4 years ago I inherited a portion of an IRA he had. I'm pretty sure it was in his trust. Maybe you could go a similar route. I owe no tax unless I take money out of it which I'm supposed to take a certain amount out every year and it's taxed. People here know a lot more than I do but it's something you could look into.

Hog's Gone Fishin · 01-31-2021, 09:33 AM

Can't you just get it into an ETF to start compounding until you decide. Then you can roll it into a Roth or a 529 when they start working

**Buehler445** · 01-31-2021, 10:30 AM

Quote:

Originally Posted by Hog's Gone Fishin

Can't you just get it into an ETF to start compounding until you decide. Then you can roll it into a Roth or a 529 when they start working

That's probably what I'll do. If I roll it into a Roth, I'll have to pay attention to the tax for the varmints for the year.

wutamess · 01-31-2021, 03:10 PM

Fidelity has a kids ROTH IRA that doesn't have to have earned income. I started one for all four of my kids last month. They're putting their birthday, Christmas $, etc into it.

Fidelity specifically states you don't have to have earned income as long as it makes a sense. Now the kids are coming up with $20 here and there wanting to invest it in their accounts and watch it grow.

The ROTH IRA has to be transferred to them on on their 18th bd.

**TinyEvel** · 01-31-2021, 03:34 PM

We started a 529 plan for our kids in 200 and 2002. They’ve gained about 50% on the steady inputs over 18 years. They’re in college now and paying all the costs from that account sure feels good.

eDave · 01-31-2021, 03:49 PM

How old are your kids? Yikes!

**DaKCMan AP** · 01-31-2021, 04:54 PM

Quote:

Originally Posted by wutamess

Fidelity has a kids ROTH IRA that doesn't have to have earned income. I started one for all four of my kids last month. They're putting their birthday, Christmas $, etc into it.

Fidelity specifically states you don't have to have earned income as long as it makes a sense. Now the kids are coming up with $20 here and there wanting to invest it in their accounts and watch it grow.

The ROTH IRA has to be transferred to them on on their 18th bd.

Link?

I found this https://www.fidelity.com/retirement-ira/roth-ira-kids

But the child still has to have earned income.

KCUnited · 01-31-2021, 06:19 PM

This why I hire my kid to be my financial advisor so I can then invest their income into a Roth IRA that they advised me about. Win/win

06-27-2016, 11:23 AM
DaFace Kind of a mod Join Date: Aug 2005 Location: Donkey Land Casino cash: $-1653101	Investing megathread extravaganza A place to talk about investing stuff. Last edited by DaFace; 02-19-2021 at 06:35 PM..
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01-31-2021, 02:42 AM	#6917
Buehler445 Supporter Join Date: Apr 2007 Location: Scott City KS Casino cash: $-1365266	Great stuff. Thanks Rain.
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01-31-2021, 09:19 AM	#6923
philfree Indian Twitter Join Date: Nov 2000 Location: Free Agency Casino cash: $-1983802	When my dad passed away 4 years ago I inherited a portion of an IRA he had. I'm pretty sure it was in his trust. Maybe you could go a similar route. I owe no tax unless I take money out of it which I'm supposed to take a certain amount out every year and it's taxed. People here know a lot more than I do but it's something you could look into. __________________ [/SIGPIC]
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01-31-2021, 09:33 AM	#6924
Hog's Gone Fishin Fish are scared of me Join Date: Nov 2001 Casino cash: $-1429523	Can't you just get it into an ETF to start compounding until you decide. Then you can roll it into a Roth or a 529 when they start working
Posts: 40,646

01-31-2021, 03:10 PM	#6926
wutamess MVP Join Date: Aug 2000 Location: Lee's Summit Casino cash: $4711637	Fidelity has a kids ROTH IRA that doesn't have to have earned income. I started one for all four of my kids last month. They're putting their birthday, Christmas $, etc into it. Fidelity specifically states you don't have to have earned income as long as it makes a sense. Now the kids are coming up with $20 here and there wanting to invest it in their accounts and watch it grow. The ROTH IRA has to be transferred to them on on their 18th bd.
Posts: 8,290

01-31-2021, 03:34 PM	#6927
TinyEvel Just a li'l Evel Join Date: Sep 2005 Location: Bald. Goatee. Jorts. Casino cash: $2399601	We started a 529 plan for our kids in 200 and 2002. They’ve gained about 50% on the steady inputs over 18 years. They’re in college now and paying all the costs from that account sure feels good.
Posts: 12,311

01-31-2021, 03:49 PM	#6928
eDave Banned Join Date: Jan 2013 Casino cash: $9998560	How old are your kids? Yikes!
Posts: 53,803

01-31-2021, 06:19 PM	#6930
KCUnited Cheat Death Join Date: Nov 2007 Location: Land of Drincoln Casino cash: $-1391756	This why I hire my kid to be my financial advisor so I can then invest their income into a Roth IRA that they advised me about. Win/win
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