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| I think you are right on the 529 money being used only for education purposes. The 529s have some special tax teatment that makes them attractive. When my kids were too young to work I wan't making enough money to worry much about income taxes. As they got older and could work I wanted to pay them. I paid them the same as adults for hog work. A kid can make money pretty fast loading and washing. They didn't need the money much and saved most of it. They both had quite a bit of cash when they got out of their first 4 years of college. We paid for 4 years of college because that was not negoiable. After that it was their decision what they did. One went right into professional school with cash and the other went to a job he had been offered before he graduated from college.
I despise 529 because they controll what you can with the money while it is accumulating. My son hated letting money sit in the bank. He was free too pull it out as he saw fit and he did. He went halfs with me on several groups of bottle calves and did much better than bank rates. As his banker says he is sitting on a pile now. The pile includes some bank accounts and stocks.
My philosopy is teach your kids to work and save at young age. If they work hard for their money they won't piss it away. This is important to this disscusion because the only advantage a 529 has is that it prevents the kids from using the money stupid purpses.
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New Dad: Tax Savings and College Investing Ideas
