Five—Make That Six—Secrets About a Roth IRA

//Five—Make That Six—Secrets About a Roth IRA

Here’s a blog post from Investopedia on five “secrets” of a Roth IRA. Give it a quick read/watch but also think about this secret, which isn’t mentioned: you can use a Roth IRA for higher education expenses, as with a 529 plan. Why should you consider it?

  • With a 529 plan, only qualified education expenses are allowed, so if Junior doesn’t end up going to college, you may need to change the beneficiary on the 529 designated for him.
  • With a Roth IRA, if you earmark a portion of it—or dedicate an entire Roth IRA to higher education expenses and Junior doesn’t go to college, well, your Roth IRA stays a Roth IRA.
    • Before making this decision, you will want to consider carefully the state-tax benefits on offer from your state of residence. They might make the 529 a better option.

Things to know

By |2018-02-28T14:05:28+00:00February 28th, 2018|Advice|