How do you invest in your childrens' future for college education?

Question

I want to invest for my 2 year old daughters future, any ideas?

I am currently receiving $158 a month for 3 years from a home I sold and partially financed. The total will be about $6,000 in 3 years and then I will invest what I can afford after that.

I opened a regular savings account for her, But with the current cost of college, and to think of the price probably doubling in 15 or 16 years, I need a plan that will yield the most money.

Is a no load mutual fund better then a 529 plan ? (Texas)

or should I open an IRA in her name?

What is the minimum age for an IRA?

Answer 1

Open a 529 plan for each child. You can also open up a Coverdell Education Savings account sometimes referred to as an "education IRA", but there are some contribution limits with such an account. 529 plans are more flexible.

A regular savings account is probably not a good idea, when you invest money as far into the future as you do. After taxes and inflation are taken into consideration, you lose money that way.

Texas does not give you any tax advantages, when you invest in a state sponsored 529 plan, which is why you can go anywhere without giving up tax benefits. Many parents chose the Utah state sponsored 529 plan because of its low cost and efficient management.

For more information about 529 plans click here http://www.vilkri.com/pubreader.php?page...

Answer 2

Open a college fund that is invested by a broker in a few years.