Is a Roth IRA or 529 plan better when saving for college?

Do you know that you can use Roth to support your kid's education? 

Is a Roth better than a 529 plan and when the kids go to college ?

A:With regard to which is better for college expenses, I'd have to say the nod goes to the Roth because of a special exemption that it is allowed.

Generally speaking, you can't withdraw funds from a Roth until you're 59½. Assuming a parent wouldn't be 59½ when the child starts college, there would, under normal circumstances be a penalty to any withdrawals he makes. However, the exception to this rule is for qualified educational expenses. The parent would be allowed to withdraw from a Roth prior to turning 59½ if he uses the funds for his college expenses or those of a family member.

Since contributions to both the 529 plan and the Roth are made in after-tax dollars, and since the earnings inside them accrue tax-free, there is little difference between the plans on that basis.

I would change that advice slightly if someone wanted to contribute more than they were allowed to contribute to a Roth. The 2012 Roth contribution limitation is $5,000 per year ($6,000 if you're 50 or over) with certain income limitations. If someone wants to contribute $10,000, for example, to a child's college education, I'd advise putting the maximum amount into the Roth and the difference into a 529.