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Old 08-12-2016, 03:00 AM
 
Location: The land of infinite variety!
2,050 posts, read 1,184,536 times
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Here is the situation. My only grandchild, a girl, is 3 years old. Since I live on a fairly modest income and have my own IRA and retirement income set aside, I wanted to set up a 'savings routine' that I could follow without much pain.

Here is what I do:

1. Saving my change, not including quarters. If I fill a pint jar with pennies, nickles and dimes it comes to @ $20.

2. Saving uncommon coins such as gold or metal dollars, bicentennial quarters, half dollars, wheat pennies that I come across. Also any $2 bills I come across. I understand they will never be worth much more than face value, but it is the idea of saving more than anything else. It comes out to about @ $10/ week.

3. I have come across Silver Certificates in various denominations as well as older silver dollars that I just set aside.

None of this dips into my budget, and is a conscious habit. Well, obviously the problem is that, after saving several hundreds of dollars this way, there is a lot of change around.

Does anyone have a suggestion as to the best way to put this money towards her higher education or just for her in general? Should I do it or should her parents?

Appreciate any advice, and hopefully this is the right place to post this.
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Old 08-12-2016, 06:58 AM
 
Location: Shady Drifter
2,444 posts, read 1,730,452 times
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Convert the change to cash and set up a 529 plan for her benefit. Which state you go with will depend on where you live and potential tax benefits, but a 529 plan will allow the money to grow tax-free, and be withdrawn for qualified educational expense tax-free as well.
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Old 08-12-2016, 07:15 AM
 
Location: The land of infinite variety!
2,050 posts, read 1,184,536 times
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Quote:
Originally Posted by LeagleEagleDFW View Post
Convert the change to cash and set up a 529 plan for her benefit. Which state you go with will depend on where you live and potential tax benefits, but a 529 plan will allow the money to grow tax-free, and be withdrawn for qualified educational expense tax-free as well.
Thank you. Sounds like just what I was hoping was out there. The tax-free part addresses my biggest concern.
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Old 08-12-2016, 07:51 AM
 
Location: Shady Drifter
2,444 posts, read 1,730,452 times
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Quote:
Originally Posted by Mayiask View Post
Thank you. Sounds like just what I was hoping was out there. The tax-free part addresses my biggest concern.
If you live in a state with a state income tax, look into your state's 529 plan (they are run state by state), as it may provide you with tax benefits. If you live in a state without a state income tax, or if the 529 plan benefits are too negligible to matter to you, Utah and NY have the best 529 plans, and you don't have to be a resident to enroll, nor does the money have to be spent on a college in that state.
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Old 08-12-2016, 07:51 AM
 
1,585 posts, read 1,301,262 times
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Sounds like a lot of work for a little bit of money. I would keep all that stuff for yourself. Open a 529 or ESA for her and do direct deposit of $50 a month or $25 whatever you can swing, just fit it into your monthly budget, set it, and forget it.

Use the items already collected for the initial investment.
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Old 08-12-2016, 03:41 PM
 
Location: Santa Rosa
486 posts, read 613,751 times
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I can't remember the last time I saw anything in the second list and the last time I saw a silver certificates $100 was in Las Vegas about 5 years a go. Unfortunately they are not worth much more then the newer bills.
I can't imaging collect $10 worth of list #2 every week unless I worked as a casher.
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Old 08-18-2016, 10:35 AM
 
Location: Florida -
8,235 posts, read 9,990,552 times
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We've been paying for the prepaid college tuition plans for our two youngest grandsons (about $5K per year) ... and will pay about $10K per year during college for each of our older grandkids (3). The latter will come out of an annuity we set-up a couple of years ago and required RMD funds starting in a year or two.

I've looked extensively for tax breaks for grandparents paying toward grandchildren's college -- and haven't found much. Even the popular 529 plans have very limited tax breaks (and other problems) for grandparents.
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Old 08-18-2016, 11:02 AM
 
Location: Florida
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I would go with the 529 plan but probably one owned by her parents and that they also contribute too. If a second child comes along the 529 plan can be shifted to that child if not needed by the first so you do have some flexibility.


If you want to give to the child you would have to use a uniform gift to minors account. It would probably be in a saving account so would not even keep up with inflation. The next problem is that at 18 (depends on state) the child would get the money and can use it for any reason. Thus I would lean toward the 529.
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