Personal Finance Q & A
Q. We're planning for our 8-1/2 year old daughter's education. We have $30,000 in mutual funds. And the university where I work would pay two-thirds of her tuition if she attends as an undergraduate (about $14,000 annually). It also offers to apply one-third of the school's tuition to the cost of any other college (about $7,000 annually). Should we save more? We'd also like to open a Roth IRA for her. Who handles these for children?
S.P., via e-mail
A. "Yes, you may well need more savings if your daughter goes to a private four-year college other than where you are now working," says Gary Schatsky, a fee-only financial planner in New York.
The $30,000 in mutual funds may not be enough of a nest egg if she goes elsewhere, he says, even if it doubles in value over the next eight or nine years.
But, says Mr. Schatsky, "you are well on your way, and way ahead of most families, in terms of saving for college."
As for the Roth IRA, you can get it through any bank or mutual fund company, Schatsky says. But to fund the Roth, your daughter will have to have earned income.
You might also consider opening an education IRA for your daughter. It has tax advantages that will help the process along.
Q. Where can I find the price of Westinghouse stock from 1950 to 1970? I need this information to establish the cost basis for some CBS (formerly Westinghouse) stock I sold recently. It was a gift from my father-in-law in 1970.
B.C., via e-mail
A. To get your answer, call the transfer agent from CBS, which is the Bank of New York, at 800-507-7799.
Have as much information about the stock deal as possible, including the Social Security number of those who actually owned the stock in 1970.
Q. I was planning to invest $1,000 in a mutual fund, but the broker handling the transaction said that only $950 will actually be invested in the account. Does the fund manager get the extra $50? Is this a standard procedure?
G.S., New York
A. Yes, it is standard. You apparently have a fund with a front-end sales charge of 5 percent.
The commission, called a load, goes to the sales agent, in your case, the broker. It does not go to the portfolio manager.
Questions about finances? Write: Guy Halverson The Christian Science Monitor 500 Fifth Ave., Suite 1845 New York, NY 10110 E-mail: firstname.lastname@example.org