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If you have a legacy goal and/or plan on trusts then I think this makes a lot of sense. You also have to consider the modern US university system may be very different in a decade or two. Could be a lot less seats. But the 10% penalty + taxes isn't the worst option cost in the world.
Massachusetts
Just do Fidelity, it's already a best-in-class brokerage firm: https://www.fidelity.com/529-plans/massachusetts
I was just coming back to post that link.
There's a new law that allows rolling over a balance into a Roth. I believe it's up to $35,000.
Yep, already going to do that. I may have mentioned it before, but, while trying to treat my two kids exactly the same, managed to take a relatively small UTMA for the youngest and accidentally invest some in NVDA because he liked video games. The other kid didn't have the space at the time. Whoops. Now the younger kid has a way bigger account than the older and I'm trying to make up for it with some rollovers using the leftover 529 money. And still may have some 529 monies leftover for grandkids.
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The only issue here is does your state allow it tax free. I have plans in IA and IN for my kids. Iowa changed the law last year to allow Roth conversions without state recapture of taxes. Currently Indiana does not. If I did this with my kid’s IN plan I would have to repay all the state tax benefits I received.
Kicking myself for not buying build a bear in 2020. Our daughter loved it. Only up 2,000% since then.Yep, already going to do that. I may have mentioned it before, but, while trying to treat my two kids exactly the same, managed to take a relatively small UTMA for the youngest and accidentally invest some in NVDA because he liked video games. The other kid didn't have the space at the time. Whoops. Now the younger kid has a way bigger account than the older and I'm trying to make up for it with some rollovers using the leftover 529 money. And still may have some 529 monies leftover for grandkids.
And, I mean, who knew I'd accidentally pick the best stock of the decade? (And did I pick it for myself? Well, of course not!
I get that, but you can use other investments for college, so I’m not a fan of overfunding. Our oldest two cost about $5-7k annually for their college, fees and everything. But they’re living at home and attending local schools.
It's a tax deduction now for contributing. So you would, if married, get to deduct up to $2000 from your state taxable income. This year, hurry
Well, then it looks like I'm right on track!
Would think this is particularly good time to take some of your gains, particularly if you have any losses to harvest as well...
LTCG. Nothing wrong with selling stocks at all time highs.
He might have been planning to wait until he was retired, and at a much lower income consequently, before realizing long term capital gains. To avoid the federal LTCG tax.
Maybe, but #3 really isn't a thing - he can take out earnings there with penalties and tax. A bit better, he can take out contributions tax free (just lose opportunity cost of the money in a tax free state, which is a pretty big hit - IMO more than 15% LTCG). #1 generally turns out worse than #2 as you have to pay it back and lose the tax advantaged growth. #2 is probably the least painful. Hopefully it doesn't come to that and the shutdown comes to an end (though, honestly, it looks unlikely).
I wouldn’t take a loan from either the TSP or take from the IRA. I took a loan from USAA already for $3k and will take another if needed. 0% so why not? If you’re not with USAA, see if your credit union or bank offers the same.
Not really.
this is the reason why it's an option.
