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Last updateWed, 28 Sep 2016 4pm

Food & Wine

Roundup: Follow your local farmers as the season changes

Roundup: Follow your local farmers as the season changes


Eliza Ridgeway/Town Crier
Todd Miner pulls pumpkin pies hot from his traveling oven at the Los Altos Farmers’ Market – and will keep baking at Mountain View’s Sunday market when the Los Altos market season ends Sept. 29.

Only two weeks remain to...

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Your Health

LAHS student launches international website on mental health

LAHS student launches international website on mental health


Photos courtesy of nadia ghaffari
Months after founding the website TeenzTalk, Ghaffari, second from left, spoke with international teens at the Yale program about methods to overcome stress.

When Nadia Ghaffari went to Yale University this summer ...

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Your Home

Permanent pop-ups: Prefabricated homes hit the local remodel market

Permanent pop-ups: Prefabricated homes hit the local remodel market


Megan V. Winslow/Town Crier
The Krivokon family of Mountain View observes the installation of a prefabricated home on Pilgrim Avenue.

Pop-up houses are sprouting like mushrooms around Los Altos and Mountain View, but unlike other pop-up structur...

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On The Road

Exploring the Presidio: In and around town in two hybrids

Exploring the Presidio: In and around town in two hybrids


Photos Courtesy of Gary Anderson
Despite the price difference between the Acura RLX Sport Hybrid, above, and the Hyundai Sonata the two cars share a number of features.

 

The Presidio of San Francisco has existed as a settlement and milita...

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Senior Lifestyles

Expert offers strategies for seniors intimidated by the gym

Expert offers strategies for seniors intimidated by the gym


Courtesy of Brandpoint
To ward off “gym-timidation,” fitness expert Brian Zehetner encourages seniors to find a workout buddy and start slowly.

No one really relishes the idea of growing older and experiencing the health issues that can accompan...

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Wedding To Remember

Got a wedding singer? Musicians and engaged couples work in tandem to orchestrate perfect night

Got a wedding singer? Musicians and engaged couples work in tandem to orchestrate perfect night


Courtesy of Dick Bright
Dick Bright, a veteran Bay Area musician, manages local bands such as the Dick Bright Orchestra, Club 90 and Encore. His bands ramp up the energy at weddings.

A wedding soundtrack draws nearly everyone to the dance floor....

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Your Kids

Back to School

Is Early Decision the right choice for your student?

Is Early Decision the right choice for your student?


Courtesy of Hollis Bischoff
This chart compares the rate of Early Decision acceptances with the overall acceptance rate at various colleges.

As students apply to an ever-increasing list of schools, colleges are challenged to predict accuratel...

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Education IRAs aren't just for kids' college anymore

By now, you might have heard that beginning in 2002, you can contribute up to $2,000 annually to an Education IRA, compared to the current $500 yearly maximum. What many people aren't aware of is that recently passed tax-reform legislation greatly expands what you can spend this money on.

Previously your Education IRA could only be used to pay for college expenses. Beginning in 2002, you can tap these funds tax free to pay for a gamut of qualified school-related expenses not only for college but also for private and public primary and secondary educational institutions. Qualified expenses may include: computer equipment and software (no games) used by the student and other household members for educational purposes; Internet service used by the student and other household members for educational purposes (e.g. research for a term paper); tutoring; school uniforms; books and school supplies; transportation; room and board and tuition; and extended-day school programs.

By paying these and other education-related expenses with your Education IRA, you pay no taxes on your withdrawals, which gives you more buying power.

For example, if you contributed the $500 maximum to an Education IRA this year for your newborn child and then contributed the $2,000 maximum next year and every year until your child turns enters kindergarten, you could potentially accumulate $15,465 at an 8 percent annual compounded rate of return.

That money can be withdrawn tax free, which is a much better deal than if you had saved that money in an interest-bearing savings account and then had to pay taxes on the interest you earned.

Consider using a combination of an Education IRA and a 529 college savings plan if you want to save for your children's college and primary and secondary school education. The 529 plans can only be used for college expenses, but the Education IRA could be available to pay for school-related expenses until college. However, unlike other savings plans such as Education IRAs, anyone at any income level can contribute to a 529 plan.

Beginning next year, 529 plan withdrawals also will be federally tax-free. In addition, U.S. residents can participate in any state's 529 plan and set up accounts for their children, grandchildren, friends or even themselves. But keep in mind that each state's plan may invest your contributions differently and levy its own costs and fees. Be sure to shop around for the 529 plan that best fits your needs.

Education IRAs and 529 plans are a one-two punch that is hard to beat. With college expenses increasing faster than inflation, parents need all the help they can get. Your financial consultant can help you determine which savings plan, or combination, is the best strategy for you.

Steve Zeller is a financial consultant with A.G. Edwards & Sons Inc., member SIPC, 379 Lytton Ave., Palo Alto 94301. For information, call 326-5010.

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