Do you make your teens contribute to their 529 plans?

[Anonymous]

I've had 529s for both kids since they were sucking on their mama's teat.

Now they's 10 and 8. Round bout the time they's 14 or so they can earn them some money.

So my question is this: Do you make them contribute to their 529 plan with some of they's earnings? Cuz what I'm thinkin' bout, right, is making them do that but also givin' them money to they's Roth IRAs and shit.

Figgerin' this way I'm matchin' they's college moneys and double-dipping on tax breaks and shit.

Whatchu think? Hollaback.

[Anonymous]

Yo. They aint even going ta Harvard on the Pike with that grammar. Let them spend they green on Natty lights.

[Anonymous]

What the hell?!

[Anonymous]

I'll answer the question even though I'm assuming you're a troll since your writing style is ridiculous homeboy wannabe.

No, I wouldn't make them contribute to their 529s. However, I would let them know that while I will pay for college, they are responsible for spending money. They should be banking money that they earn in high school to cover their miscellaneous expenses while in school.

[Anonymous]

I think that is a fabulous idea (minus the poor writing).

It gives them ownership in the cost of their college education.

The kids I knew who flunked out of college or never attended class were not the ones who were putting themselves through school. They were the ones who didn't have to pay for anything.

When you are helping to pay in some form you realize how much college costs, and take it a bit more seriously than if you had no stake in it and don't have a clue what it takes financially to earn a degree.

It is also a good way to teach responsible saving.

[Anonymous]

I think it might actually teach the wrong lessons. You want to incentivize the right behaviors. But by doing this you are effectively taxing them, so disincentivizing them from working. If each dollar they save is one less dollar you yourself contribute to their college costs, it is a tax with no benefit for them.

Better to set up an account and say for each dollar they save, you will add $0.50 for their living costs when they are in college, or some such.

[Anonymous]

Anonymous wrote:Yo. They aint even going ta Harvard on the Pike with that grammar. Let them spend they green on Natty lights.

Best response I've ever read on DCUM!

[Anonymous]

Anonymous wrote:I think it might actually teach the wrong lessons. You want to incentivize the right behaviors. But by doing this you are effectively taxing them, so disincentivizing them from working. If each dollar they save is one less dollar you yourself contribute to their college costs, it is a tax with no benefit for them.

Better to set up an account and say for each dollar they save, you will add $0.50 for their living costs when they are in college, or some such.

Yes, because you want to teach your kids that paying your own way is bad. Find a way to get someone else to pay for you AND give you extra $!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think it might actually teach the wrong lessons. You want to incentivize the right behaviors. But by doing this you are effectively taxing them, so disincentivizing them from working. If each dollar they save is one less dollar you yourself contribute to their college costs, it is a tax with no benefit for them.

Better to set up an account and say for each dollar they save, you will add $0.50 for their living costs when they are in college, or some such.

Yes, because you want to teach your kids that paying your own way is bad. Find a way to get someone else to pay for you AND give you extra $!

OP, I think you're on the right track. For the vast majority of families, if the kids save more money now, it will benefit them in the long run because they will not have to take out so much in loans. It's not as if the parents are putting less away because the kids are saving money.

It's better to discuss college finances with kids earlier and involve them in planning--this may help motivate them to work hard in school to try to get merit-based scholarships as well as encourage them to save. Also point out that they shouldn't take out giant loans to get a fluffy degree (i.e., $100,000 in debt in performing arts with hopes of making it big on Broadway).

I believe that a child has to have earned income to put in a Roth IRA, but the child could fund the Roth with their earnings and you could pay back the child (instead of you contributing directly to an IRA for them).

[Anonymous]

No.They contribute to their Roth.

[Anonymous]

DCs have to cover the cost of fun/frivolous expenses. If DC wants to go see a band, DC has to cover the ticket.

[Anonymous]

Anonymous



I think it might actually teach the wrong lessons. You want to incentivize the right behaviors. But by doing this you are effectively taxing them, so disincentivizing them from working. If each dollar they save is one less dollar you yourself contribute to their college costs, it is a tax with no benefit for them.

You just gave an excellent description of what is wrong with our tax system.

[Anonymous]

Anonymous wrote:

Anonymous



I think it might actually teach the wrong lessons. You want to incentivize the right behaviors. But by doing this you are effectively taxing them, so disincentivizing them from working. If each dollar they save is one less dollar you yourself contribute to their college costs, it is a tax with no benefit for them.

You just gave an excellent description of what is wrong with our tax system.

No, I did not, but this is not the forum to discuss that.