Invested in individual brokerage account for kids

Intel
C_e\_v9!

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C_e\_v9!
Oct 26, 2021 9 Comments

Im saving for my kids education..i didnt know of 529 plan but used my individual brokerage and kept on adding to it and investing in FSKAX & FZROX & S&P500 index fund...i was able to make 30k invested innthese 3 funds...but now i learnt 529 is better....is there a way i can withdraw and put in 529 plan after a year to lessen tax hit???
Also i am not sure where my kids study US or India..can i use these funds in 529 to pay for education expenses in india or out of us??
Inread the unstitutiin should be federal finnacial aid....whats that and please elaborate more on this...

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TOP 9 Comments
  • Also if accidentally kids turn out to be brilliant and get their own scholarships then its a waste too..
    Oct 26, 2021 2
  • Juniper
    scandeep

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    scandeep
    Invest in roth IRA is better than 529. What if your kids later decide they don’t want to go to college.
    Oct 26, 2021 0
  • Intel
    C_e\_v9!

    Go to company page Intel

    C_e\_v9!
    OP
    Hmm....so u suggest to keep doing what i do now and let it compound over time and take a tax hit when using dor educational or any other purpose
    Oct 26, 2021 0
  • As their custodian, you can set up a 529 UTMA account for them -- it is associated with their ssn and they control the 529 when they turn 18, but it still is in a 529

    You will need to sell their current shares, which you will owe cap gains on beyond 2200 (kiddie tax)

    Another option is to have their UTMA reimburse you for eligible expenses you incur, like summer camps and extracurriculars. Then, you can start afresh and fund a 529 for them but still in your control indefinitely. I believe this also requires liquidating the assets and recognizing gains, as I think technically they can't reimburse costs to you with appreciated assets without it counting as an effective sale
    Oct 27, 2021 0
  • So after all thoughts i went with traditional account with long term approach
    Oct 26, 2021 0