Last month I wrote about a range of available non-retirement investment accounts and broke down some advantages and disadvantages of each. When it came to 529 college savings accounts, reader flyernick had some objections to my math: "On one hand, you’re arguing that at withdrawal, you get to exempt $12000 in gains because of the std. deduction. Then you compare that, 'In a … [Read more...] about Why I like tax-free internal compounding, and why you might (and might not)
higher education
Differences between non-retirement investment options
If you're in the right mood, there's something a little bit depressing about the subject of investing: how boring it is. An easy way to think about this is that if you make the maximum contribution to a 401(k) and IRA every year, for 20 years, at the end of that 20 years, you'll be rich. How rich you'll be depends on a lot of factors, but the fact you'll be rich doesn't depend … [Read more...] about Differences between non-retirement investment options
Prepaid tuition plan roundup
This week I wrote about the prepaid tuition plans offered by Washington state and Virginia. To close out the week I wanted to share a brief roundup of the other prepaid tuition programs still out there. First, take a look at the overview, then I'll offer some brief commentary: State Plan Premium (discount) to current tuition In-state public benefit In-state … [Read more...] about Prepaid tuition plan roundup
How to think about prepaid tuition plans: Virginia Prepaid529
Yesterday I described the best prepaid tuition plan I know of, Washington state's Guaranteed Education Tuition plan, which allows you to place a tax-free bet on the trajectory of tuition inflation at Washington public universities. It's a weird investment vehicle, but you could see how it might play a speculative role in the portfolio of a sufficiently wealthy person, … [Read more...] about How to think about prepaid tuition plans: Virginia Prepaid529
How to think about prepaid tuition plans: Washington’s Guaranteed Education Tuition plan
I've written extensively about 529 college savings plans, which are a way for the wealthy to permanently shield intergenerational transfers of appreciated assets from taxation while also allowing those assets to internally compound tax-free. However, there's a second kind of investment vehicle conceived of by section 529 of the Internal Revenue Code: prepaid tuition … [Read more...] about How to think about prepaid tuition plans: Washington’s Guaranteed Education Tuition plan