[USER]

Looking for thoughts / other alternatives on this. Pros/cons.
My spouse and I are foster parents. So far we have had four babies in our home.

They have all moved on to forever families and we have maintained relationships with them and all their new families.

We would like to start saving for them or somehow plan for them in our estate planning.

We are strongly considering 529 accounts. However, our state also provides for adopted children to have college paid for at the in state rate. But the 529 would expand on that.
Thoughts on the 529 for this purpose??

We like that the account can be used for education (we’re teachers) or funding a Roth IRA.

One con we see is that if we ever wanted to designate a different beneficiary, it would have to be a relative of the original beneficiary (not a relative of us).

Would love to hear other pros/cons or alternatives.

Please keep in mind that we are committed to our kids and determining a way to save for them, that’s a non-negotiable!

[Dominique]

I love that you want to save for them! My kids are adopted from foster care and will get free college from the state they came from, not the one they are in now sadly.

But I did find out that it’s possible you can ask any school if they would accept the tuition waiver so that’s always an option if they go to a different state. Just thought I would mention.

I would say the Roth is more flexible.

I’m curious if they would have to somehow claim the 529 money when they apply for other schools.

Would it be better putting in a high yield savings account for more flexibility. Not sure of their ages.

Good luck!!

[Bill]

How wonderful and generous! If education is a priority, 529s are great. If your foster kids don’t use it all, they can save it and use if for their own kids down the line.

You might not only be changing their lives, but their whole family tree.

[Laura]

There is a lot of financial aid available to foster youth so I’m not sure a 529 would be ideal. I would consider a brokerage acct.

and then help them fund Roth IRAs once they start working.

[Chelsea]

We’re also foster parents and are putting half of the monthly stipend away in high yield savings (for now) for them.

I’ll prob hold onto it until they get closer to college age and decide then if it would be better to use it for college or give it to contribute to a Roth IRA instead.

I’m also not convinced 529 is the best considering the support they can get as foster kids

[Elana]

I believe you could open a 529 in your name and when the time comes, transfer a portion into their name.

[Author]

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