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<blockquote data-quote="sierra1995" data-source="post: 336550" data-attributes="member: 1059">I'm using the 529 program over the Roth IRA - simply because it can be used for generations. In savage's scenario, if kid 3 doesn't use it, Savage can keep the 529 going and continue to invest in it, then give it to his grandkids, and if they don't use, they can give it to their kids, and it will continue to grow. In the IRA option, (if not used for college), upon your death the funds have to be distributed to your beneficiaries. Your beneficiaries can choose to re-invest but I think there is some sort of penalty or tax? i'm not sure. In 49994's link, it mentioned that you'll have to claim income taxes on the gains in your Roth IRA if used for higher education.. where a 529 you don't.&nbsp; If Savage does to decide to pay the taxes and the penalty on the 529, I think he is only taxed on the gains, and the 10% penalty comes off the gains... so he's still money ahead. That is my interpretation. Signed - armchair investment/retirement guy.</blockquote>

[QUOTE="sierra1995, post: 336550, member: 1059"] I'm using the 529 program over the Roth IRA - simply because it can be used for generations. In savage's scenario, if kid 3 doesn't use it, Savage can keep the 529 going and continue to invest in it, then give it to his grandkids, and if they don't use, they can give it to their kids, and it will continue to grow. In the IRA option, (if not used for college), upon your death the funds have to be distributed to your beneficiaries. Your beneficiaries can choose to re-invest but I think there is some sort of penalty or tax? i'm not sure. In 49994's link, it mentioned that you'll have to claim income taxes on the gains in your Roth IRA if used for higher education.. where a 529 you don't. If Savage does to decide to pay the taxes and the penalty on the 529, I think he is only taxed on the gains, and the 10% penalty comes off the gains... so he's still money ahead. That is my interpretation. Signed - armchair investment/retirement guy. [/QUOTE]

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