Reply to IRA v. 529 for college savings?

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[quote=Anonymous]Here is a useful article. http://collegesavings.about.com/od/rothiras/ss/rothiras_2.htm
Roth IRA not covered by FAFSA, so if you are counting on financial aid, then IRA might be a good choice. But also note that you can withdraw only the contributions penalty-free, not the interest, so its use may be limited. If you want to save more than just contribution amount for college, then maybe switch to 529.

But don't forget to save for your own retirement. You really might want to max out your own retirement savings in the IRA before even considering setting aside money for your child's college. In general, I've read that the proper order of savings is emergency fund>401k>IRA>529. Once the higher level is maxed out, then move to the next level.

Also, fwiw, I've read some articles recently suggesting the prepaid tuition plans are not as beneficial as many people once thought they were. A basic 529 might be better. Here is one example. http://www.savingforcollege.com/articles/20100108-Does-your-states-prepaid-tuition-plan-make-sense  read your plan language closely.

Good luck![/quote]

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