VBINX & VSCGX as education funds?

**kv968** · 06-13-2007, 06:58 AM

I would say these are good funds to hold in such an account. They hold a nice blend of stock/bonds and perform quite well. I would suggest holding these is a tax-sheltered account such as a 529.

As far as waiting for a "dip in the market", I'd say just invest it now unless of course you know when that dip is coming. And if you do, please let me know also

**disneysteve** · 06-13-2007, 08:41 AM

I agree with kv968. Good funds and forget trying to time the market. It isn't possible.

**Ima saver** · 06-13-2007, 11:36 AM

I like the funds too. Vanguard's money market pays very well.

**rerod** · 06-14-2007, 08:42 AM

My kids arnt 100% sure they want to go to college so I think the 529 might not be the best choice.

One other question though. Should I open one of the Vanguard accounts under my wifes name and the other under mine? Or should we be the custodians of each or what?

Thanks again.

**rerod** · 06-23-2007, 05:57 PM

I think I totaly screwed up!!!!!!!

We decided to open the accounts under the children names with us, the parents, as custodians. But I thought Id better talk to my advisor just to make sure he agreed.

He then wrote me I should only reinvest less then 11k a year so we wouldn't have to pay gift taxes.

Here is the email..
================

""Hi Mr. Stevenson.

I was quite upset after you advised me to only reinvest less than the reportable $11,000 today ,and not at our initial meeting months ago. I wondered why you would have recommended me to close both of my children's IUTMA accounts since they were both over $40,000 because they were both making about 8% after fee's ,when our Vanguard prime money market was only making 5.5% and it would take 4 years to reinvest with out paying the gift tax. So I contacted our tax preparer who told me I had a 60 day window to reinvest the whole amount in the vanguard accounts VBINX and VSCGX. She wanted me to give her a day or two to make sure. I hope she is correct.

Mike
================

I sure hope my tax preparer is right about the 60 day window.. Does anyone know if I just screwed my kids education funds by taking advice and not following the golden rule of "trust no one"? I feel like a fourth grader at the moment.

**disneysteve** · 06-23-2007, 06:08 PM

I'm not exactly sure if this helps, but a few comments.

The gift tax limit currently is $12,000, not $11,000.
If you are married, you and your spouse can each give each child $12,000, so a total of $24,000 per child per year.
If you exceed that limit, it means you need to file a gift tax form. It does not mean any tax will be due, however. You can visit irs.gov or speak with your accountant for details.

**rerod** · 06-24-2007, 07:33 AM

Yes that info does help. Thanks

So if the 60 day window does not exist. It will only tie up the money for a few years. Not 4

I'm eagerly waiting for my accountant to call back today.

VBINX & VSCGX as education funds?