Planning for Children's College Expenses ROTH IRA vs 529 Education IRA?

[panda]

Interesting stats on the colleges with the best return on investment.  Several of the California State School have made the top 50 list including: Rank UCB (#8) , UCLA (#36), UCI (#28), UCSD (#12), and UCD (#35). The way that the universities were rated is by potential earning of the new graduate in the next 30 years vs the total cost of attendance.

Source:http://www.bestcolleges.com/features/best-roi-colleges/

 

[Bullsback]

Paris,
I bet you grew up from a middle class family. Am I correct?

I do agree with your post. If you are a college student paying your own way through college, I am sure he will attend every class trying to learn something that he can apply to the real world. When things are handed to you, you feel entitled and you take things for granted. You can skip classes whenever you feel like it, partying all night, wasting your parents' money.

When you have skin the game, you take your studies seriously.

I think the job market is also going to change quite a bit over the next 15-20 years. Perhaps a college education will not be as valuable as it used to be in the past. I can also see a potential shift from a W2 job market to independent contractors. 

$300k per kid for college??! Whatever happened to - if you want a college education take out some loans and after graduation You better find a job real quick to pay down those loans? That's what I had to do. My parents couldn't afford to pay for my 10 year college plan. I feel that these days children are handed everything so they come out entitled and have no sense of responsibility. If there are some bills to pay it'll be a fire under them to get cracking. And it's all about the quality of their education. Good luck of I pay for their art degree so they can teach for $40k/ year. I'll pay for living expenses but even if I can pay their college in cash I won't. They should pave their own way and if they are responsible and I see that they have done well with some sensible plan after graduation - at that point I'll maybe pay 50% of that student loan.

So I'm only going to comment on your shift from W-2 to contractor and point out that the labor laws are pretty strict. I see it highly unlikely that companies would be able to do this.  That said, if a shift is to more government wide benefits (and thus companies pay less), than I suppose their is less concern from a labor fairness perspective. However, I don't see that happening. In fact, I wouldn't be surprised if in the future we see an eventual shift back to pensions (albeit...better funded pensions) as the younger generations are products of the recession and in general (despite all the debt) have statistically shown to be more focused / concerned about longevity risks and their retirement (given what they saw their parents go through). 

So with that in mind, as companies compete for talent, you'll see companies shift their benefits to ensure they can get the talent they want (specifically for those industries where your talent is absolutely critical). 

In terms of college, I'll just say my personal opinion is post-recession, kids are entering a different world than the pre-recession days. I graduated in 2005 and was lucky to get a job before everything busted (and grateful to keep a job during the bust, despite many colleagues being laid off).  But during the 10 years in between, as I interview people, you don't come to appreciate how much school / education costs have increased as well as the competition (although right now, the market is good, their was a pretty extended window where it was extremely soft...unless you were graduating out of a very desirable sector).

Combine that with the debt and while my retirement is more important, me driving a $100K car while my kids deal with massive debt isn't something I personally consider a fair trade off. I'd rather help my kids (albeit juggling the fact that they still feel the responsibility and in theory, pay that help forward to future generation's of "Bullsback").  Than add in the cost of housing and the situation becomes pretty tough (if you want to live in the general vicinity of where you grew up). 

 

[momopi]

Did you go to Tetzlaff Jr. high? 

I grow up in Cerritos, went to Tetzlaff JR. High then onto Gahr high.  And you are right about that part of Norwalk within ABC boundary, relatively better value and the kids can go to Cerritos high or Whitney high if got accepted. 

Yes!  I transferred from Kraemer Middle School (Placentia) to Tetzlaff Jr. High.

For those who are not familiar, Gretchen A. Whitney High School (Cerritos) and Oxford Academy (Anaheim) are the top ranking schools in their districts:
https://en.wikipedia.org/wiki/Oxford_Academy_(California)https://en.wikipedia.org/wiki/Whitney_High_School_(Cerritos,_California)

When I lived in Anaheim, I attended Rio Vista Elementary school which was in Anaheim but part of Placentia-Yorba Linda Unified School District.  After graduation they bused the kids to Placentia for Jr High (Kramer) and High school (Valencia).  Oddly, being a resident of Anaheim, we were not in Anaheim Union School District, but Oxford Academy in Cypress is.

We moved to Lakewood and I graduated from Artesia High School, but went to Cerritos High for 1 summer school session --  they had better computer lab.    Some of the manga at Cerritos Library was donated from my collection.

 

[peppy]

Interesting stats on the colleges with the best return on investment.  Several of the California State School have made the top 50 list including: Rank UCB (#8) , UCLA (#36), UCI (#28), UCSD (#12), and UCD (#35). The way that the universities were rated is by potential earning of the new graduate in the next 30 years vs the total cost of attendance.

Source:http://www.bestcolleges.com/features/best-roi-colleges/

Don't forget to account for field of study in your calculations.

 

[panda]

It seems for undergrads, engineering and business majors get paid the most. Not sure what algorithm they are using to figure out the 30 year revenue output. Usually state schools in the top 35 have strong engineering and business programs which I am sure is being accounted for. The cost of attendance numbers are assuming in state tuition.

Interesting stats on the colleges with the best return on investment.  Several of the California State School have made the top 50 list including: Rank UCB (#8) , UCLA (#36), UCI (#28), UCSD (#12), and UCD (#35). The way that the universities were rated is by potential earning of the new graduate in the next 30 years vs the total cost of attendance.

Source:http://www.bestcolleges.com/features/best-roi-colleges/

Don't forget to account for field of study in your calculations.