Looking at starting a college fund for my 7 week old. Assuming he doesn’t get a scholarship and college isn’t free by the, what is a good program to use? Ideally I’d like to move one lump sum into it and not have to pay monthly, but also don’t want to have to deal with capital gains tax. What if he decides to go to an out of state school? What if he doesn’t use it (scholarship, military, etc)?

I would suggest spending it all on bitcoin.

You're a good papa for starting now. Don't get financial advice on here.

Does the Texas Tomorrow plan still exist? That is what my parents did. I got scholarships - first two years of school were more or less a free ride - I know they got a good chunk of it back. I think it locked in tuition rates on the start date of the plan...if I'm remembering right...it worked well for them/me.

Talk to a financial planner and invest in a 529 Plan. I used American Funds.

We had cash for Cathy but never had to use. College is expensive but teenagers in high school are not cheap. You don't have to come up with all the funds on the day college starts. Cathy already had her car. I paid the tuition and my wife gave her a monthly allowance. We never had to touch the savings through 4 years at Baylor and 3 years at UT Law.

What you're looking for is the now non-existent Texas Tomorrow Fund option where you bought x number of years of tuition. Most states don't offer that anymore since many lost money after conception given they came about in the late 90's internet stock mania. We bought in at $202 per month for 15 years ($25k) for 128 hours to any Texas public school, in 2002 I think it was. It will be a very good deal if my two finish at A&M and Tech (both at Blinn now) as they hope, not so much if they go to say UNT.

The only plan I'm aware of for you to have flexibility of in-state or out-of-state or no school and a refund with a penalty, is a traditional 529 College fund. There may be individual schools who offer something, but you're clearly tied to that school.

You forgot about the option of Elizabeth Warren getting elected, everything will be free.

See your CFP.

Charlie

Cathy also got a National Merit Scholarship from Pfizer.

Ditto on the Elizabeth Warren commit. It will all be free.

This is the same thing my wife and I have set up for our 2 granddaughters. Ours are set up with us as the owners with our grand kids as the receivers with our boys as our successors. We do a monthly transfer from my wife's substitute teaching fun money account. Your financial planner should be able to help you do a lump fund transfer.

Got one upper potential this thread has - Yoda

Used to be you could give your kids 10k a year tax free, Goldie may know if its still current or if it would even be advantageous to use that route for an investment.

No capital gains = 529.

But 10% penalty and tax on gain if not used for educational purposes. Doesn't matter where he goes to school or what kind of school as long as it is accredited. Can also be transferred to other family members if it isn't used. The key to a 529 is not overfunding it.

If you have money over a 529 you want to give them then I would start a Roth IRA as soon as they are old enough to work.

Correct, but now it is $15k, or $30k per couple.

As others have said, a 529 plan does everything you are looking for. Invested funds will grow tax-free, as long as the money is used for college or other after-high-school training. We set up accounts for each of our grandkids when they were born. If the beneficiary doesn't use or need the funds, they can be used for another relative. There is a penalty if the funds are not used for schooling. The school doesn't have to be in your home state, nor does the plan. Some 529 plans are better than others; better returns, lower expenses. I hear the Utah plan gets good reviews.

My parents paid for my room and board and books I took loans for most of the rest. My debt was in no way crippling when I graduated, paid it off in 3 years. My wife did the same her parents paid her room and board and she had some but not much loans, a few scholarships and worked part time. We paid hers off before mine. We also bought a house cars etc. in that time.

I don't think college debt is as bad as people make it out to be if you get a job and actually try to pay it off. I know people who are 10 years older than me and still paying on theirs because they haven't made an attempt to pay it off. I don't know if my kids will go to college or a trade school or what so I plan on saving waiting and seeing.

roller

We bought the Texas Tomorrow fund for my son in 1995 for $8,000. He graduated from ATM in ‘13. We paid for 1 extra semester, room and board and books. He graduated debt free. Don’t know if it’s still available anymore.

It's not available. Think they have like a 200 million dollar shortfall with what they already committed to. You made out like a bandit on that deal.

Full

If you are eligible to contribute to a Roth IRA, you can pay for college expenses with it. And if you don't need it, it is retirement. A combo of 529 and Roth would be best.

^^^THIS^^^

Broken record.

Yeah, I consider it my best investment. Pretty much quadrupled the initial investment they way I figured. I get lucky every now and then.

Some people make plans, live below our means, save, want to do what is right 20 years from now instead of RIGHT NOW, and people call us one uppers.

But not intelligent people. Just trollers.