Personal Finance Advice and Education! (7 Viewers)

[Sand]

So after I opened the Roth and realized I couldn't contribute, I opened a traditional IRA and was planning on doing backdoor later. So I made a deposit but I guess I accidentally put it in the Roth account. I can withdraw that now without tax repercussions right, since I deposited more than my limit, which is zero?

In a Roth your contributions are extractable; your earnings are not. Contributions are post tax, so there are no consequences - it's just post tax monies.

Thanks. Looks like it was just incorrect over the weekend and it's currently in my traditional.

BTW, not sure why I'm being so nice - you're absolutely torching me this game. I see checkmate everywhere...

 

[Andrew74]

So after I opened the Roth and realized I couldn't contribute, I opened a traditional IRA and was planning on doing backdoor later. So I made a deposit but I guess I accidentally put it in the Roth account. I can withdraw that now without tax repercussions right, since I deposited more than my limit, which is zero?

In a Roth your contributions are extractable; your earnings are not. Contributions are post tax, so there are no consequences - it's just post tax monies.

Thanks. Looks like it was just incorrect over the weekend and it's currently in my traditional.

Does your other IRA have money in it still ? If it does and you do a backdoor Roth, the IRS requires you to prorate the backdoor across all your traditional IRA monies. You will have a nice tax bill come April. You need to zero out all your traditional IRAs by moving them into a 401(k) before doing a back door.

 

[jm192]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

 

[shuke]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

I thought the new 6-month rate was over 6?

 

[Desert_Power]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

I thought the new 6-month rate was over 6?

There is a fixed and variable component to the rate

 

[jm192]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

I thought the new 6-month rate was over 6?

Yeah. The fixed rate is in addition to the inflation linked rate, which is 6.xx

 

[steelerfan1]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

Meanwhile Ally goes up to 2.5%

 

[OrganizedChaos]

I am trying to run some scenarios on what I may want to do at the end of the year to find the sweet spot with regards to maximizing what I can do to generate some more income and minimizing taxes. One thing I am having to deal with as I generate any more income I deal with fallout from going over my estimate for Covered California insurance which drove my premiums for this last year. I am using FreeTaxUSA.com (love that website) to generate the scenarios. It still only has 2021 forms but it is close enough and I know the differences between 2021 and 2022 to ballpark it. For those that have marketplace coverage and get a 1095-A, does the monthly second lowest cost silver plan premium refer to the full cost of it or the subsidized premium? I assume it is the full premium but I am not 100% certain and being wrong on that assumption could be a major mistake in what I can or cannot do without incurring heavy tax penalties so if anyone does know from their own experience I would appreciate any input. Thanks in advance.

 

[Chemical X]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

 

[Desert_Power]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

Meanwhile Ally goes up to 2.5%

You can get more than that on your cash.

 

[Runkle]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

Meanwhile Ally goes up to 2.5%

You can get more than that on your cash.

Yeah looks like Capital One is 3% on a regular savings account and 4% on a 12-month CD.

 

[jm192]

Aaand I bonds have a 0.4% fixed rate. A little bit more interesting going into 2023.

Meanwhile Ally goes up to 2.5%

You can get more than that on your cash.

Yeah looks like Capital One is 3% on a regular savings account and 4% on a 12-month CD.

Sure.

With the 0.4%, I-bonds are up to a composite 6.89% for 6 months. And maybe this is a sign for climbing fixed rates on I-bonds. But we won't know for 6 months.

I said earlier in the thread that we're getting to the point that it may be worth looking into other investment vehicles as CD's and Treasury Bills are moving up towards where I-Bonds are. There comes a point where a % point or 2 isn't worth the lack of liquidity.

So I'm definitely not recommending people rush out and buy the max I-bond amount come January 2023. But if the fixed rates climb, they may still be worth getting.

 

[Runkle]

I said earlier in the thread that we're getting to the point that it may be worth looking into other investment vehicles as CD's and Treasury Bills are moving up towards where I-Bonds are. There comes a point where a % point or 2 isn't worth the lack of liquidity.

heck I'm not sure a % point or two isn't worth dealing with the treasury direct website

 

[dino259]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

 

[Sand]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

 

[dino259]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

 

[jm192]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I didn't realize it had gone up. Would certainly be nice if it was more, but cool it went up some.

 

[:deadbevo:]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I like the match in my 401k. Max out contributions + 50% match? Thanks. ~31k to ~34k... ill take it.

 

[jm192]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I like the match in my 401k. Max out contributions + 50% match? Thanks. ~31k to ~34k... ill take it.

I unfortunately don't get a match. Definitely wish we did.

 

[stbugs]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I like the match in my 401k. Max out contributions + 50% match? Thanks. ~31k to ~34k... ill take it.

Also, I thought you couldn’t do an IRA if you had a 401k plan available. My match is going up $500 as well so maybe a small extra catch up for all the money I lost in the market! I do like the increased contributions because my wife and I both work so the 401k contributions would be taxed at our highest rate so nice to not have to pay taxes on it now.

 

[Chemical X]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I like the match in my 401k. Max out contributions + 50% match? Thanks. ~31k to ~34k... ill take it.

Also, I thought you couldn’t do an IRA if you had a 401k plan available. My match is going up $500 as well so maybe a small extra catch up for all the money I lost in the market! I do like the increased contributions because my wife and I both work so the 401k contributions would be taxed at our highest rate so nice to not have to pay taxes on it now.

• Having a 401(k) account at work doesn't affect your eligibility to make IRA contributions.
• Your income determines whether your traditional IRA contributions are deductible.
• The amount of money you can contribute to a Roth IRA depends on your income.
• Spousal IRAs allow you to contribute when your spouse works even if you don't have any earned income yourself.
• The Internal Revenue Service imposes a 6% excise tax if you make excess contributions to your IRA.

 

[stbugs]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I like the match in my 401k. Max out contributions + 50% match? Thanks. ~31k to ~34k... ill take it.

Also, I thought you couldn’t do an IRA if you had a 401k plan available. My match is going up $500 as well so maybe a small extra catch up for all the money I lost in the market! I do like the increased contributions because my wife and I both work so the 401k contributions would be taxed at our highest rate so nice to not have to pay taxes on it now.

• Having a 401(k) account at work doesn't affect your eligibility to make IRA contributions.
• Your income determines whether your traditional IRA contributions are deductible.
• The amount of money you can contribute to a Roth IRA depends on your income.
• Spousal IRAs allow you to contribute when your spouse works even if you don't have any earned income yourself.
• The Internal Revenue Service imposes a 6% excise tax if you make excess contributions to your IRA.

Thanks. I knew we couldn’t contribute, but it was the income limits with both of us working.

 

[wilked]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I like the match in my 401k. Max out contributions + 50% match? Thanks. ~31k to ~34k... ill take it.

Also, I thought you couldn’t do an IRA if you had a 401k plan available. My match is going up $500 as well so maybe a small extra catch up for all the money I lost in the market! I do like the increased contributions because my wife and I both work so the 401k contributions would be taxed at our highest rate so nice to not have to pay taxes on it now.

• Having a 401(k) account at work doesn't affect your eligibility to make IRA contributions.
• Your income determines whether your traditional IRA contributions are deductible.
• The amount of money you can contribute to a Roth IRA depends on your income.
• Spousal IRAs allow you to contribute when your spouse works even if you don't have any earned income yourself.
• The Internal Revenue Service imposes a 6% excise tax if you make excess contributions to your IRA.

Thanks. I knew we couldn’t contribute, but it was the income limits with both of us working.

Backdoor Roth is easy and straightforward, I’ve been doing that for years

 

[shuke]

Does money have to be in a traditional IRA for a certain period of time before it can be converted to a Roth?

Is there a limit in how much can be converted?

 

[Chemical X]

not sure if it was posted here, but the 401k 2023 max limit was increased to $22.5k and the over age 50 catch-up moved up to $7.5k.

i think this is a $3k increase from 2022. not too ****ty.

Yeah but they didn't adjust the IRA limit.

It went from 6k to 6.5k.

That's right, just disappointed how little it went up, would rather do IRA than 401k.

I like the match in my 401k. Max out contributions + 50% match? Thanks. ~31k to ~34k... ill take it.

Also, I thought you couldn’t do an IRA if you had a 401k plan available. My match is going up $500 as well so maybe a small extra catch up for all the money I lost in the market! I do like the increased contributions because my wife and I both work so the 401k contributions would be taxed at our highest rate so nice to not have to pay taxes on it now.

• Having a 401(k) account at work doesn't affect your eligibility to make IRA contributions.
• Your income determines whether your traditional IRA contributions are deductible.
• The amount of money you can contribute to a Roth IRA depends on your income.
• Spousal IRAs allow you to contribute when your spouse works even if you don't have any earned income yourself.
• The Internal Revenue Service imposes a 6% excise tax if you make excess contributions to your IRA.

Thanks. I knew we couldn’t contribute, but it was the income limits with both of us working.

you can contribute to an IRA if you have a 401k……

 

[Chemical X]

Does money have to be in a traditional IRA for a certain period of time before it can be converted to a Roth?

Is there a limit in how much can be converted?

my understanding is no and no, but obviously there are tax ramifications here. you can only convert ira to roth once every 12 month period, if you are looking to spread the pain of taxes. but with the market being down so much, now is a good time for conversion. if you have $200k in an ira remember, if you convert it all to a roth you have to pay tax on that $200k as if it were income.

 

[ConstruxBoy]

Does money have to be in a traditional IRA for a certain period of time before it can be converted to a Roth?

Is there a limit in how much can be converted?

my understanding is no and no, but obviously there are tax ramifications here. you can only convert ira to roth once every 12 month period, if you are looking to spread the pain of taxes. but with the market being down so much, now is a good time for conversion. if you have $200k in an ira remember, if you convert it all to a roth you have to pay tax on that $200k as if it were income.

Also don't forget the Pro Rata rule: link

 

[shuke]

Does money have to be in a traditional IRA for a certain period of time before it can be converted to a Roth?

Is there a limit in how much can be converted?

my understanding is no and no, but obviously there are tax ramifications here. you can only convert ira to roth once every 12 month period, if you are looking to spread the pain of taxes. but with the market being down so much, now is a good time for conversion. if you have $200k in an ira remember, if you convert it all to a roth you have to pay tax on that $200k as if it were income.

Also don't forget the Pro Rata rule: link

Thanks guys. Does the Pro Rata rule apply only to funds I have in the traditional IRA I am converting from, or all of my traditional IRAs?

 

[jm192]

Does money have to be in a traditional IRA for a certain period of time before it can be converted to a Roth?

Is there a limit in how much can be converted?

my understanding is no and no, but obviously there are tax ramifications here. you can only convert ira to roth once every 12 month period, if you are looking to spread the pain of taxes. but with the market being down so much, now is a good time for conversion. if you have $200k in an ira remember, if you convert it all to a roth you have to pay tax on that $200k as if it were income.

Also don't forget the Pro Rata rule: link

Thanks guys. Does the Pro Rata rule apply only to funds I have in the traditional IRA I am converting from, or all of my traditional IRAs?

All.

 

[ConstruxBoy]

Yeah, all, which is the ***** of it. I actually left my last employers 401k in the 401k when I left since it was good, low cost Vanguard funds and it wouldn't be counted as IRA money if I convert any of my other IRA money to a Roth.

 

[Tom Hagen]

Does money have to be in a traditional IRA for a certain period of time before it can be converted to a Roth?

Is there a limit in how much can be converted?

my understanding is no and no, but obviously there are tax ramifications here. you can only convert ira to roth once every 12 month period, if you are looking to spread the pain of taxes. but with the market being down so much, now is a good time for conversion. if you have $200k in an ira remember, if you convert it all to a roth you have to pay tax on that $200k as if it were income.

The 12 month rule does not apply to Roth conversions Link

The one-per year limit does not apply to:​

• rollovers from traditional IRAs to Roth IRAs (conversions)
• trustee-to-trustee transfers to another IRA
• IRA-to-plan rollovers
• plan-to-IRA rollovers
• plan-to-plan rollovers

 

[shuke]

Let me give you a scenario.

I just opened a traditional IRA and put 6k in it. My wife has a couple traditional IRAs. Let's say they equate to 100k.

If I want to only convert the 6k I have in my traditional, what does that mean from a tax standpoint?

 

[Instinctive]

Let me give you a scenario.

I just opened a traditional IRA and put 6k in it. My wife has a couple traditional IRAs. Let's say they equate to 100k.

If I want to only convert the 6k I have in my traditional, what does that mean from a tax standpoint?

You and your wife's IRAs are different.

 

[Chemical X]

Let me give you a scenario.

I just opened a traditional IRA and put 6k in it. My wife has a couple traditional IRAs. Let's say they equate to 100k.

If I want to only convert the 6k I have in my traditional, what does that mean from a tax standpoint?

it’s like you earned an extra 6k in income that you get taxed on…..

 

[Sand]

These things always blow me away - the percentage of folks who are paycheck to paycheck is insane. Not for the poor folk, but for the folks that earn 150k-200k (47%) and above 200k (28%). The PYMENTS report that this links to is even more eye opening. I can't imagine earning 200k+ and having every penny go out that's coming in.

Rule 1 of the Personal Finance thread - don't bloody spend all your money like it's a Tik Tok challenge.

More than 1 in 4 workers making $200,000 or more now say they live paycheck to paycheck. So even rich people are struggling to save, and pros offer 3 solutions

Rising prices have left “little purchasing power,” even for the country’s highest earners, pros say.

www.marketwatch.com

 

[wilked]

Let me give you a scenario.

I just opened a traditional IRA and put 6k in it. My wife has a couple traditional IRAs. Let's say they equate to 100k.

If I want to only convert the 6k I have in my traditional, what does that mean from a tax standpoint?

The I in IRA is individual. Has no bearing on you

 

[matttyl]

These things always blow me away - the percentage of folks who are paycheck to paycheck is insane. Not for the poor folk, but for the folks that earn 150k-200k (47%) and above 200k (28%). The PYMENTS report that this links to is even more eye opening. I can't imagine earning 200k+ and having every penny go out that's coming in.

Rule 1 of the Personal Finance thread - don't bloody spend all your money like it's a Tik Tok challenge.

More than 1 in 4 workers making $200,000 or more now say they live paycheck to paycheck. So even rich people are struggling to save, and pros offer 3 solutions

Rising prices have left “little purchasing power,” even for the country’s highest earners, pros say.

www.marketwatch.com

Where is it going?! Jeez. I mean I understand my wife and I are lucky with zero debt (other than house with ridiculously low interest rate), no student loan or car payments, no alimony or child support - but still. What are folks spending all their money on?!

 

[Steve Tasker]

Where is it going?! Jeez. I mean I understand my wife and I are lucky with zero debt (other than house with ridiculously low interest rate), no student loan or car payments, no alimony or child support - but still. What are folks spending all their money on?!

Car payments, outrageous mortgage payments, student loan debt, medical debt, private schooling/daycare....

 

[Chemical X]

Where is it going?! Jeez. I mean I understand my wife and I are lucky with zero debt (other than house with ridiculously low interest rate), no student loan or car payments, no alimony or child support - but still. What are folks spending all their money on?!

Car payments, outrageous mortgage payments, student loan debt, medical debt, private schooling/daycare....

this…..

 

[Buckna]

Where is it going?! Jeez. I mean I understand my wife and I are lucky with zero debt (other than house with ridiculously low interest rate), no student loan or car payments, no alimony or child support - but still. What are folks spending all their money on?!

Car payments, outrageous mortgage payments, student loan debt, medical debt, private schooling/daycare....

this…..

Lifestyle creep is a real phenomenon. More money you make, the bigger the house, the fancier the car, more expensive toys, etc. There’s also a reason the saying “money is burning a hole in your pocket” exists. Or the “urge to splurge.” You make a lot more, the easier it is to tell yourself “I work hard and should play hard,” “I deserve it” or “I’ll just make that back next month” or something similar.

 

[Sand]

Where is it going?! Jeez. I mean I understand my wife and I are lucky with zero debt (other than house with ridiculously low interest rate), no student loan or car payments, no alimony or child support - but still. What are folks spending all their money on?!

Car payments, outrageous mortgage payments, student loan debt, medical debt, private schooling/daycare....

Car payments - that's why I see so many luxury cars around. Mortgages - honestly most folks should have these at 3-4% or so, so those should be pretty affordable.

 

[Chemical X]

we have been programmed to believe that a mortgage and car payments are a way of life. i used to get asked what my favorite car is/was, my answer was always, whatever car i own outright. with a mortgage, 2 car payments and taxes/housing expenses, the going monthly nut is what? $3500-$6000? if you pay $6k a month, that is $72k annual and basically negates a $125k/yr job after taxes?

 

[Judge Smails]

I agree. A mortgage is one thing. Necessary but accelerating payoff with a lower term is key. Did a 15 year at 2.75% and have 3 years left. Will be paid off when I retire. Didn’t upgrade the house to keep up with the Jones’s. And cars? My wife and I both were driving 2005’s (CTS and Denali). Everyone around us had newer cars. Ours were still nice and drove fine. Bought the 2005’s in 2007. Paid cash for mine. Just got an Audi A6. 2019. For cash. Haven’t had a car payment in over a decade and it has allowed us to really ramp savings.

 

[Chemical X]

I agree. A mortgage is one thing. Necessary but accelerating payoff with a lower term is key. Did a 15 year at 2.75% and have 3 years left. Will be paid off when I retire. Didn’t upgrade the house to keep up with the Jones’s. And cars? My wife and I both were driving 2005’s (CTS and Denali). Everyone around us had newer cars. Ours were still nice and drove fine. Bought the 2005’s in 2007. Paid cash for mine. Just got an Audi A6. 2019. For cash. Haven’t had a car payment in over a decade and it has allowed us to really ramp savings.

no kids, car payments or mortgage, though i did grab a beach condo 2nd property. max out the 401ks and i’ve been buying euros….i figure since i plan to relo there, 1:1 exchange is worth my cash. with rates bumping and our reliance on debt, i wonder how this affects santa’s birth season. if you have CC debt, money gonna start flying out the door.

 

[thecatch]

These things always blow me away - the percentage of folks who are paycheck to paycheck is insane. Not for the poor folk, but for the folks that earn 150k-200k (47%) and above 200k (28%). The PYMENTS report that this links to is even more eye opening. I can't imagine earning 200k+ and having every penny go out that's coming in.

Rule 1 of the Personal Finance thread - don't bloody spend all your money like it's a Tik Tok challenge.

More than 1 in 4 workers making $200,000 or more now say they live paycheck to paycheck. So even rich people are struggling to save, and pros offer 3 solutions

Rising prices have left “little purchasing power,” even for the country’s highest earners, pros say.

www.marketwatch.com

Where is it going?! Jeez. I mean I understand my wife and I are lucky with zero debt (other than house with ridiculously low interest rate), no student loan or car payments, no alimony or child support - but still. What are folks spending all their money on?!

I don't think this is a crazy stat, at least for high COL areas like CA. You need to make about six figures to just afford to rent a place in Northern California. $200k doesn't make you wealthy.

 

[Sand]

I don't think this is a crazy stat, at least for high COL areas like CA. You need to make about six figures to just afford to rent a place in Northern California. $200k doesn't make you wealthy.

200k makes you rich. Not spending it makes you wealthy.

 

[Tau837]

These things always blow me away - the percentage of folks who are paycheck to paycheck is insane. Not for the poor folk, but for the folks that earn 150k-200k (47%) and above 200k (28%). The PYMENTS report that this links to is even more eye opening. I can't imagine earning 200k+ and having every penny go out that's coming in.

Rule 1 of the Personal Finance thread - don't bloody spend all your money like it's a Tik Tok challenge.

More than 1 in 4 workers making $200,000 or more now say they live paycheck to paycheck. So even rich people are struggling to save, and pros offer 3 solutions

Rising prices have left “little purchasing power,” even for the country’s highest earners, pros say.

www.marketwatch.com

I don't disagree with your overall take, but the answer depends a lot on where you live. $200K means different things if you live in San Diego vs. Raleigh, NC, two places I have lived for many years. There are significant deltas in cost of housing, taxes, and other cost of living components.

My BIL and his wife live in San Diego area. They have a high mortgage (not interest rate, monthly payment), two car leases, private school payments for their two kids, high taxes, and assorted other high costs of living. I'm not sure they live "paycheck to paycheck" but they probably aren't too far from that, and I would guess they combine to earn $200K per year or so. Obviously, they made life choices that put them in their current situation, but they are happy, at least right now.

 

[Steve Tasker]

Car payments - that's why I see so many luxury cars around. Mortgages - honestly most folks should have these at 3-4% or so, so those should be pretty affordable.

I'm not saying you're wrong, just offering some things that people are paying for. The mortgage rate itself might be reasonable, but plenty of people buy houses that they can't afford.

 

[matttyl]

So I know next to nothing about college funding planning and fafsa. My only child is 7 so we’re still years away, and why I’ve never looked into it. I just want to be sure I’m not doing things now, and over the next 10 years to limit our ability to obtain financial aid when the time comes.

Child received an inheritance in his name of about $25k from a recently deceased family member. We opened a savings account for this. It actually gets pretty decent interest. We also put birthday and Xmas monies in that account, currently just under $30k in their name, and I think my wife and I are “custodians” of it. I also purchased $10k in I bonds in my child’s name (considered a gift to the child I believe) right before the 9.62% window closed. That’s in their name as well. I also opened a 529 and funded it this year and will continue to put in the max deduction my state allows ($4k) each year - though that’s in my name, not his.

I guess my question is will all that money in his direct name hurt his ability to obtain aid? From my limited reading it seems that assets in the child’s name are counted far more negatively than assets in parents name when calculations are done. Our hope is to find at least 50% of the cost ourselves and with grandparents possibly closer to 75% - but still want him to have some skin in the game. Anything I should be aware of and either should be doing or shouldn’t be doing over next 10 years?

 

[stbugs]

These things always blow me away - the percentage of folks who are paycheck to paycheck is insane. Not for the poor folk, but for the folks that earn 150k-200k (47%) and above 200k (28%). The PYMENTS report that this links to is even more eye opening. I can't imagine earning 200k+ and having every penny go out that's coming in.

Rule 1 of the Personal Finance thread - don't bloody spend all your money like it's a Tik Tok challenge.

More than 1 in 4 workers making $200,000 or more now say they live paycheck to paycheck. So even rich people are struggling to save, and pros offer 3 solutions

Rising prices have left “little purchasing power,” even for the country’s highest earners, pros say.

www.marketwatch.com

It makes me feel better to be honest. Not that it’s a good thing but in terms of me looking at people who I think are in our income bracket that have way more toys than us.