Wednesday, March 19, 2014

New Goal

I'm making changes to my goals.  I still plan on investing but I may not be able to contribute to The Fund account as much as I'd like but who said it would be easy to save. I'm keeping the same goals just adding one more.

If you were following from the beginning, I was planning on using The Fund to help me reach financial independence earlier than 58.  But also to use it as a way of helping pay for my future kid's college education instead of investing in a 529.  It didn't make sense to invest in a 529 when currently, my state (California) does not offer tax breaks for contributing to a 529.  Well, in late February, an assemblywoman from the San Francisco Bay Area introduced a bill to give a 20% tax credit (up to $500) for contributing to the 529.  Here are the specifics on the bill. Although it isn't a law as of yet, I feel it will get passed so I have added to my goals of contributing $2.5k to a 529 to max out on the tax credit.

You may be wondering how I can contribute to a 529 without a child.  I plan on opening up an account and have my niece as a beneficiary and contribute $2.5k to it per year just to get the tax credit when the bill passes.  If we are able to have children, I'll switch the beneficiary to my kid.  If we aren't fortunate, my niece will continue to be the beneficiary.  Either way, I get a tax benefit and my niece/kid(s) gets help with paying for college.  I say it's a win win.  

Plus, how can you say no to free money?  LOL  I certainly won't.  


  1. I'm pretty sure you can open a 529 account in your own name and contribute to it and then transfer it to your future children should they come to be. It might add a bit more flexibility to your plan and my wife and I have thought of doing so to either help fund further education for one of us or children if/when they come.

  2. Hey PIP. I was considering putting myself or my wife as the beneficiary when I open the 529 plan, but we don't plan on furthering our education. We both work for the government so we feel that our jobs are pretty stable. We also don't have any nieces/nephews besides our niece so if we are unable to have children in the future, then my niece will get that monetary help for college.