Where to put college money after you max out 529 state tax deduction?

[Anonymous]

We have maxed out on the state tax deduction for the year. But we can afford to put in more. We can probably afford to put more in future years as well. Where should i put this money?

In the same 529
Open up another state 529 with low fees
A savings account
A brokerage account
Or Something else?

[Anonymous]

Roth IRA is hands down the best way to save for college. However if you have so much surplus cash your income may be so high as to need a backdoor Roth. But that's the answer.

[Anonymous]

What state? If it is VA, you may not actually be maxed out.

If you are not already maxing your Roth contribution, then ROTH as suggested above, but really you should be doing that before worrying about college savings.

[Anonymous]

Anonymous wrote:What state? If it is VA, you may not actually be maxed out.

If you are not already maxing your Roth contribution, then ROTH as suggested above, but really you should be doing that before worrying about college savings.

Roth is not an acronym, pp. No need to capitalize every letter. It's named for the late senator who created the accounts.

[Anonymous]

Roth.

[Anonymous]

So what if you've already maxed Roth too?

[Anonymous]

Anonymous wrote:So what if you've already maxed Roth too?

Than just normal savings. You don't need a tax shelter to do this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What state? If it is VA, you may not actually be maxed out.

If you are not already maxing your Roth contribution, then ROTH as suggested above, but really you should be doing that before worrying about college savings.

Roth is not an acronym, pp. No need to capitalize every letter. It's named for the late senator who created the accounts.

You are welcome to submit that to the autocorrect on my phone, but thank you for your helpful contribution.

[Anonymous]

I don't get a state tax deduction. I live in VA, invest in another state's plan. I just put the amount of money I need to save in the plan. Why is the max deduction the gating factor? Are you already maxing out every other tax deferred vehicle?

[Anonymous]

I don't know what VA's plans look like, but I live in DC and they are awful. I invest entirely in an out of state plan. If the VA plans are okay but not great then I think maxing out your deduction and putting the rest out of state makes a lot of sense. As others have stated and not fully explained you should max out your Roth first. Come college time you are allowed to remove your principle from a Roth to pay for education expenses with no penalty. So, the logic is since a Roth will grow tax free just like a 529 but is less restrictive in terms of how you spend it you should max that first and only have a 529 if you want to put more in still.

[Anonymous]

This is OP. Income is too high for a Roth, but we can do a backdoor Roth. Is a backdoor Roth the next best step? I have not done because it sounds like too many steps and paperwork to track, but would if it is better than putting more money into our 529.

[Anonymous]

For thise who prefer our of state 529, which one? Are they low fee?

[Anonymous]

Utah and Nevada have ones that are popular. Nevada's is through Vanguard - not sure on Utah but they are both low fee.

[Anonymous]

How maxed out? I think the state limits are for each owner/beneficiary pair: mom->mom, Mom->dad, Mom->kid. That's 3 accounts you can max out on. then later you change the beneficiary.

[Anonymous]

Anonymous wrote:How maxed out? I think the state limits are for each owner/beneficiary pair: mom->mom, Mom->dad, Mom->kid. That's 3 accounts you can max out on. then later you change the beneficiary.

OP here - we have 2 kids, and each parent has an account for each kid, for a total of 8,000 in 4 accounts. I dont get the mom to dad one, are you saying we should open accounts for just the parents and change the beneficiary later? Is that legit?