Wouldn't that be nice! No, the plan would pay the equivalent of the in-state Florida (or whatever state you use) tuition/fees and you would have to come up with the difference. Same goes for private institutions in-state.
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College Savings - other than 529's? (1 Viewer)
- Thread starter Random
- Start date
The Ref
Footballguy
I'd take some time to read up. Every state can be completely different.
Mass uses pre paid certificates for a majority of the 200+ Public/Private College/University in state . Assume Harvard is $50K a year and Salem State U is $12.5K in 2014 for non-residents. If you send in a check for $50 this year you either get 4 years of Salem State or 1 year of Harvard at some point in the future.
The Florida plan only public university and colleges. They have 2 plans one for college and one for university and each one has it's own price.
Like I said - each prepaid can be vastly different so you need to read up Esp if one offers it for out of state.
I was keeping it simple, yes the plans do vary some, but the point is no plan is going to pay the difference between what you paid for and Harvard. As you said, in Mass you'll get either 4 years of state or 1 year of Harvard for the $50K (give or take). You pay for a plan that covers certain things, and if you go outside of those things they'll apply the equivalent of what you paid for.
I'd take some time to read up. Every state can be completely different.
Mass uses pre paid certificates for a majority of the 200+ Public/Private College/University in state . Assume Harvard is $50K a year and Salem State U is $12.5K in 2014 for non-residents. If you send in a check for $50 this year you either get 4 years of Salem State or 1 year of Harvard at some point in the future.
The Florida plan only public university and colleges. They have 2 plans one for college and one for university and each one has it's own price.
Like I said - each prepaid can be vastly different so you need to read up Esp if one offers it for out of state.
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NutterButter
Footballguy
So if you go with the Florida plan, your kid can't go to Harvard?
I'd take some time to read up. Every state can be completely different.
Mass uses pre paid certificates for a majority of the 200+ Public/Private College/University in state . Assume Harvard is $50K a year and Salem State U is $12.5K in 2014 for non-residents. If you send in a check for $50 this year you either get 4 years of Salem State or 1 year of Harvard at some point in the future.
The Florida plan only public university and colleges. They have 2 plans one for college and one for university and each one has it's own price.
Like I said - each prepaid can be vastly different so you need to read up Esp if one offers it for out of state.
Seriously, take a look at that website, it has tons of info. and you can pull up each state to see what plans they offer, what rules they have, etc.
For Florida, you can't do the pre-paid plan if you aren't a resident. If you are a resident, yes your kid can go to Harvard, but not for free (unless they get scholarships or Harvard drops their tuition/fees to the same level as Florida in-state rates).
Random
Footballguy
Are you referring to Traditional IRAs here? In my brief research it seems to be treated identical to a Roth. No?
Vincesanity
Footballguy
I use 7% inflation for my clients if they want to be totally covered. Count me in the group that thinks this bubble will burst eventually. I feel like trade schools will increase over the next 20 years. It's ridiculous the amount of school debt people have for jobs paying 40-60k.
Vincesanity
Footballguy
The private university in my town has gone from about $630hr to $790hr in the last 4 years.
NewlyRetired
Footballguy
Yes I was talking about traditionals. The income restriction on Roths always removes that choice from my mind. Of course if you do qualify for a Roth, make sure you are saving enough for retirement before saving for college.Random said:
A very very rough rule of thumb is that if you don't have a pension, you should try and save 20% of your household gross income before saving for college.
This is a good breakdown of using Roth vs 529 for education.
http://www.nerdwallet.com/blog/investing/2013/roth-ira-vs-529-plan-best-college-savings/
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Vincesanity
Footballguy
ROTH income limit is just a technicality, contribute lump sum to a traditional, don't take the deduction, no growth so no taxes due and do a ROTH conversion.
NewlyRetired
Footballguy
Yeah the backdoor Roth is sweet as lng as you don't already have money in a traditional IRA (if memory serves that is the only downside).
How many years have people been using the Roth backdoor? Has it been around forvever? I feel like I have only heard about it the last few years.
Vincesanity
Footballguy
Not sure exactly but around 2010 they eased restrictions, that's when I started pushing it.
