College Savings – 529 vs Roth IRA
Terry,
Should I save for my children’s college in a 529 or a Roth IRA? I have eight years until my oldest will be in college and my Roth is out performing the Illinois 529 plan that I opened.
Thanks for your help,
Terry Says
You definitely want to put the money in a 529 college savings account. The money will grow tax-free for college,and you can put a lot more money away. Roth (under 50) is limited to $6,000 a year. You’ll need to do more than that. And grandparents can easily contribute as well. Go to www.SavingforCollege.com to find out how your state plan ranks, whether you might get a tax deduction on state income taxes, and to get a link to directly open a plan.
