DEAR BRUCE >> My 24-year-old daughter has a 529 plan that is worth about $25,000. Scholarships paid for her undergraduate degree, and she has an assistantship for her master's degree program. She's needed very little of the money.
Her income is very low this year as a graduate student, and will be next year as well. Would it make sense for her to withdraw the money now when the tax impact would be less? If so, what should she do with it? It's a great problem to have.
DEAR GARY >> You're right! It's a problem all kids should have. Accepting that her income will be very low for the next couple of years and as a consequence she will have little or no income tax, now is the time to withdraw it. No question about that. What she should do with it is another question.
It seems to me that this would be a good time to begin investing in the marketplace. Not all at one time, but once every couple of months over six months. This could be an even more important learning experience than her college education. She should take the time and sneak in at least one non-credit course dealing with investing, just to get an idea about the language and what is expected of her.
DEAR BRUCE >> Where would an elderly person invest where the fees aren't very high?
DEAR HELEN >> Whether it's an elderly person or a young person, the fees are going to be the same, but they'll vary depending upon the choice of investments. If you're going to put your money into a bank CD, for example, the fee isn't very high, but the interest is next to nothing.
As soon as you start to get into investments like the stock market, there are certain fees and they can't be skipped. In almost every case, I would rather pay the higher fee combined with a higher interest rate. When you start talking about money market funds, CDs, etc., for all intents and purposes, right now no interest is being paid.
DEAR BRUCE >> A few years ago, I went on an "unclaimed monies" site and found my mother's name, and an amount of $500 came up. As I recall, I followed through to the point that in order to claim any money, I had to pay some fee. I let it go, figuring I could always come back. Now, I can no longer find my mother's name on the site. What's the best procedure to try to recover these monies?
DEAR B.O. >> I understand that you went through various steps before figuring it wasn't worth the trouble and deciding to pack it in. All I can suggest as a practical matter is that you go through the steps again. And for the few dollars involved, frankly, I wouldn't even pursue it.
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