Date: Wed, 26 Jul 2006 08:48:59 -0500
From: BreadWithSpam@fractious.net
Newsgroups: misc.invest.financial-plan
Subject: Re: i'm an uncle, ideas for investment gifts
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"HW \"Skip\" Weldon"  writes:

> On Wed, 26 Jul 2006 06:18:47 -0500, BreadWithSpam@fractious.net wrote:
> 
> 
> >> something i just noticed. IRAs and Roth IRAs apparently can only be
> >> withdrawn w/o penalty for education of a child, grandchild, self or
> >> spouse. 
> >
> >*contributions* to a Roth IRA may be withdrawn tax-free
> >for any purpose.  
> 
> These are retirement plans and the real benefits come when you use
> them for the intended purpose.

I was just clarifying.  I still think the best option for him
for this particular purpose (savings for niece for college)
are probably 529s.

And that he should be maxing out 401k and IRAs *regardless*.

> For college funding, go back and re-read comments by those who
> suggested you save in your name, use no-load and tax-efficient funds,
> and remember that if you gift the student shares (not cash) at college
> time you still get to use their lower-neglible capital gains rates.

That's a good thing to remember, except if the student is
trying to get financial aid.  The sale of those shares 
constitutes income, and the asset-value of them constitutes
assets - all of which are treated very differently if they
are owned by the student versus owned by the parents or 
in a 529.

Unless one's retirement savings is safely on track and
fully funded, I rate maxing out retirement accounts as
way more important than college savings - even for one's
own kids and especially for someone else's kids.


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