Husband and I are both active duty. We have 2 kids (2.5 yrs and 9 months) and have both transferred our GI Bills to them. We do plan to have 1 more child, but not for another year or two. We also currently max our TSPs and IRAs. We invest in a taxable brokerage through Vanguard (mainly VTSAX) with any leftover monthly cash, which has been minimal as of late due to home renovations.
Right now we've been putting $100 into a Robinhood account under our names for each child and investing it. Original plan was to grow their accounts to 3k and then open a taxable brokerage account and buy in to VTSAX. Our oldest's Robinhood is over 3k and the little guy's is only at about $1k. However, now I'm wondering if we should look more into a tax advantaged option? I didn't look much into 529s because they both have the GI Bill, but started to research it more when future planning for a 3rd. Should we still do 529s even though they have the GI Bill? Any other suggestions?
Transferred GI Bill. 529s, taxable brokerage, or something else?
byu/beonks inMilitaryFinance
Posted by beonks
1 Comment
I would. Before 529s we used Coverdell ESAs for ours. This was also before GIBill transfer was a thing. When the transfer option opened i divided mine between both kids. Both have 18 months of benefits which should cover 2 years of school.
So far, we are drawing from the coverdell and 529s. Both kids have opted to stay home for now. Worst case we draw down the ESA and 529s before we plan to dip into GIBill. Both kids starting in community college rather than state schools. After 2 years they both plan to transfer to a stste school. We will draw down the savings we have until it is gone or they finish school.
Because we cant predict the future what i will say as nicely as i can is your kids may go to Harvard. More likely your kids will turn out average and opt for state school, trade school or community college. This isnt a bad thing, it is what most kids do. People never talk about over saving for college but it can be a problem also.
First rule is to make sure you are meeting your retirement savings goals before saving for school for your kids. You have 2 GIBills to transfer covering alot of education. States like Texas have additional education benefits that can be used like the Hazelwood act.
If you are saving enough for retirement and other needs, have both GI Bills transferred and checked out your state benefits . . . And still want to save for college to cover other expenses, id recommend being modest about it.
Lastly, this leaves me the oppotunity to use the GIBill purely for financial reasons if both kids finish and dont draw it down. Under the current syatem of BAH or MHA i coukd do a scammy degree as a transition to retirement just to use the benefit.