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There's no reason to have a "separate" investment for this. In particular, if you use certain special types of accounts (like 529s) you may have to pay penaltie
by zeroonetwothree 12y ago
There's no reason to have a "separate" investment for this. In particular, if you use certain special types of accounts (like 529s) you may have to pay penalties if you don't use it for education.
- alistairSH 12y agoWouldn't 529s be a very good reason to have a separate investment? Tax breaks, potential matching grants from states, etc.
- ColinWright 12y agoThat's true, so one should investigate what type of long-term investment fund will give the best options, but the point remains: Start investing now.
- Jtsummers 12y agoIf you don't pass the money to the kids outside of as an education expense, the taxes are irrelevant. The money can be given to other beneficiaries. Two siblings, one's finished school with $10k leftover? Give it to kid 2. Money left from that? Either parent wanting to go back to study something? Do they have cousins? Is one of the kids now married to a spouse that wants a degree? If you ignore that it may be a bit unequal in the distribution of the money (seeming favoritism), all the money can still be spent with tax free earnings on education by passing it around to other potential beneficiaries.