As Those RMDs Come Due -- Where Next? December 8, 2024

Locator: 44504INV.

For me, the best option: 529s.

• Investments grow tax-free and distributions are tax-free.
• some say the returns on 529s may not be great but:
• a) 529s need to be relatively conservative to ensure the money will be there when the individual needs it;
• b) growing tax-free with tax-free distributions are generally not factored into the rate of return, and the higher one's tax margin, the better these 529s look;
• c) but if concerned about return and safety, consider a brokerage account dedicated toward a child's education during the years when the child is one to fourteen years of age; then move that account into a 529 for the last four years.
• one may get a higher rate of return in the early years (though taxable), and then,
• get the assurance of safety as the child approaches college; and
• the full amount is available at that time; one doesn't have to be concerned about distribution taxes
• for the most part, I'm doing the latter: higher risk, taxed accounts for grandchildren until age 12 - 14; then moving into 529's after age 12 - 14; an 80-20 mix for the first twelve years; a 20-80 mix for the last four years before they need the money for education.
  

A second option: ETFs.

Morningstar rates the ETFs: link here.

A third option: gift to family members who can use the cash to max out their own IRAs, including spousal IRAs. 

Other options: I assume there are many, but that's where I'm starting. 

One option I don't like: accounts for minors (except 529s). Examples of accounts for minors: link here.

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The Book Page

Sophia is interested in marine biology, specifically sharks, and would like to go to San Diego to get her degree in marine biology: Scripps Institution of Oceanography at UC San Diego. Out-of-state tuition would be prohibitive. I'm trying to convince her a better option: Flinders University, Adelaide, South Australia, Australia. 

The books Sophia and I are tackling this month:

• Evolution: The Whole Story, General Editor, Steve Parker; Foreword by Alice Roberts, Thames & Hudson.
• The Secret History of Sharks: The Rise of the Ocean's Most Fearsome Predators, John Long, c. 2024

The second book, John Long's, is the primary book and has just been released. The first book, Evolution, is perhaps the "bible" of "evolution." It's a reference book and not to be read straight through. It is incredibly well organized and the graphics are incredible. 

My notes on sharks are updated here.

What excites me with these two books at this point in time with Sophia and me:

• a better understanding of mass extinctions
• sharks -- one of the longest living vertebrates?
• years to evolve: 465 million years and counting
• remarkable for ability to survive the huge mass extinctions, changing environments; changing predators (p. 11)
• cartilaginous -- unique; more flexible than bony fish
• diverse species; unique niches
• evolution: homeobox genes probably more important than mutations when it comes to evolution -- p. 11 -- homeobox discovered 1984 (I graduated from high school, 1969; college, 1973; and, medical school, 1977).