It’s back-to-school time, when millions of Americans turn their thoughts to lunchboxes, backpacks, textbooks and homework.
Here on Schwab Talk, we’ll be blogging all week about school’s impact on your finances. Join the discussion and direct your questions to family finance advocate Carrie Schwab-Pomerantz, who happens to be President of Charles Schwab Foundation, or financial planning expert Rande Spiegelman, Vice President of Financial Planning for Schwab Center for Financial Research...(Read More)
Answering Your Top Questions about 529 Plans
Guest post by Rande SpiegelmanQ: When looking to save for my kids' education should I fund a Coverdell first then a 529 or is it the other way around? When withdrawing funds to pay for education which plan should I draw down first Coverdell or 529? –Tom M.
My preference would be to fund the Coverdell first, up to the limit insofar as you’re eligible. Then, if you can save more go ahead and fund the 529 to the extent you’re able (you can contribute to both in the same year). With a Coverdell, you’ll generally have more flexibility with respect to investment choices and can withdraw the money tax-free for qualified K-12 expenses as well as college. Otherwise, the two accounts are very similar...
A couple of weeks ago, I had the poignant experience of packing my 15-year-old son off for a month-long stay at a summer camp in the San Juan Islands, the first time in his life he’d be away from home for any period longer than a one-night sleepover at a friend’s house. Taking him to the airport and hugging him goodbye made me ruminate on how I’ll feel when I send him off to college in just a few years.
Setting aside some very mixed emotions about how quickly the years have passed and the inevitability of “empty-nesting,” I wondered about the things I could do to help make his first year on his own successful and our mutual transition as smooth as possible. Many of my colleagues at Schwab have college-age kids, so I thought I’d poll a few of them for their best tips on making the transition a successful one. After all, the new school year is almost here, and there are plenty of parents sending fledgling freshmen off for what will be their first time away from the nest...(Read More)
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