If one has lost their high income job when it comes to pay for college, but all those college savings have instead gone to Roth IRA accounts, the money has still been 'saved' to pay for college, with a nominal loss of perhaps a few to ten thousand dollars in state tax breaks over many years, some of which can be captured during the college years via the pass-through method I mentioned above. Yet with the IRA's you have the flexibility of not spending that money on college if your low income years extend for longer than expected, while also not having a large 529 counting against the financial aid you should now be eligible for without much income. Saying that a 529 is the 'only' tax-advantaged way to save for college is patently untrue, and similar in thinking to those who choose not to 'save' in their tax-advantaged 401k or IRA plans because they are 'only for retirement'.miamivice wrote: ↑Wed Feb 06, 2019 2:31 pmNo, there is a big difference between saving for college versus cash-flowing. Cash-flowing assumes that one has the income stream during the child's college years to pay for it. This may or may not be a good plan for everyone. For my wife and I, we would like the flexibility of not being bound to a high income job in order to pay for college, so we chose to save for college rather than cash flowing college.
No, we are not cash strapped. Money is tighter with having 2 kids both needing childcare but that is not related to college savings. We set aside all of the money for college while my wife was pregnant with each of our kids and haven't set aside anything since then.
The bottom line is that the 529 is really the only tax advantaged vehicle to save for college if a family wants to save for college. And while "cash flowing" college sounds easy here, there are few families that truly can, hence is why so many students graduate with large amounts of debt.
To be clear, we use a 529, but only because we have additional money to save after maxing multiple pre-tax, HSA, and Roth IRA accounts.