Sorry was reading a few different posts at the same time, I thought I posted the one I was reading.
Expected Family Contribution: The federal formula that determines how much your family should be able to contribute is based on a percentage of both parents' (30%) and child's (50%) previous year's incomes, and a percentage of parents' (up to 5.6%) and child's (35%) assets assumed available to spend down - all recalculated yearly. 529 plans became much more attractive to families expecting financial aid when the Higher Education Act was revised to treat them as parents' assets regardless of how they're titled. However, assets in retirement accounts go one better because they're not counted at all, which means that amounts in 401(k), IRA, 403(b), federal thrift plans, or other similar accounts are considered unavailable; the same is true for home equity. (To read more, see Choosing The Right Type Of 529 Plan and Clearing Up Tax Confusion For College Savings Accounts.)
Pay For A College Education With Retirement Funds
Of course, if an investor does make an early 403b withdrawal, he might still be required to pay the tax penalty of 10 percent to the Internal Revenue Service (IRS). The tax penalty would apply unless he can show that the money was withdrawn because of death, disability, or an unreimbursed medical expense which exceeds 7.5 percent of adjusted gross income (AGI). Another scenario where the investor would not need to pay the 10 percent tax penalty would be if he was required via court order to send money to his ex-spouse or dependents. In addition, if an investor is separated from her service via termination, permanent layoff, taking an early retirement, or quitting, if she is 55 years of age or older at the time of termination, and if she is able to establish a schedule of equal payments over her life expectancy, these scenarios might enable the investor to avoid the tax penalty.
What Are the Rules for a 403b Withdrawal?
When she is in College I will be around the 55 years old mark.
We have been working so hard at controlling all debt. We will have no credit card debt in less then 9 mts, and will only have a car payment and the house payment as large amounts of debt. Once the day care is done, we can fully fund our retirement and school funds. Dave Ramsey's books helped us so much. On top of just being sick of debt. I also take 1/2 of the money I make selling spoons/doing the craft/art fair scene and put it away for her. We had so many medical bills with her(5 IVF's) that we are trying to do every little thing to help her out.
