Callaway County

How Can Grandparents Help Their Grandchildren
Save For Their Education?

Grandparents often want to do something special for their grandchildren.  A financial gift for a grandchild’s education is one way.  A grandparent may gift up to $10,000 per grandchild, or if married, each grandparent may gift up to $10,000 without any gift tax consequence. 

What are the saving/investing options for this gift?  Are Savings Bonds our only option?  Are there other options?

The Missouri Saving for Tuition Program (MO$T) provides grandparents with a smart, flexible way to save for their grandchildren’s future.  The MO$T Program offers a choice of investment options, significant tax advantages, and the flexibility of using your savings at any eligible higher education institution both in the United States and abroad.  Another attractive feature of the MO$T program is that nearly all public and private four-year colleges and universities, two-year colleges, vocational-technical schools, proprietary and professional schools, and theological institutions in Missouri and the nation would be eligible schools of higher education.

The Education IRA is not really a retirement account—instead it is a way of saving for a child’s education.  Grandparents whose adjusted gross income is below $150,000 ($95,000 for single filers) may establish an Education IRA for the purpose of paying “qualified” education expenses of any child.  “Qualified” education expenses include tuition, fees, books and supplies, and room and board.  The major benefit of this savings vehicle is that the funds grow free of all taxes. 

There are two very important changes in the Education IRA for 2002:

•     The most you can contribute annually into the Education IRA has increased from $500 to $2,000 per child under the age of 18.

•     The use of funds is no longer limited to just college and universities—now includes   elementary and secondary school “qualified” expenses.

Minors (children under the age of 18) may not legally own securities…unless a Uniform Gifts to Minors Act (UGMA) has been set up.  This is a very straightforward way for minors to own securities in their name.  The child’s social security number is the taxpayer ID for this account.  The dollars in the account belong to the child—the grandparent is the custodian and has the responsibility to handle the money in a “prudent” manner for the benefit of the minor child.  At the age of 18, the child becomes the owner of the account and can spend the dollars in any way they wish.

Before you make any decisions about gifting to your grandchild, please check with your tax preparer, your banker, and/or your investment advisor.  They will be able to assist you with your decisions and help you establish an UGMA account.

Did You Know?

A hill in New Zealand is called 
Taumatawhakatangihangakoauotamateaturipukakapikimaungahoronukupokaiwhenuakitanataha.  This 83-letter name means “The brow of the hill where Tamatea who sailed all round the land played his flute to his lady love.”

If you named your town Llanfairpwllgwyngyllgogerychwyrndrobwyll-llantysiliogogogoch, it would mean “The church of St. Mary in the hollow of white hazel trees near the rapid whirlpool by St. Tysilio’s of the red cave”.

Residents of Webster, Massachusetts claim to have the lake with the longest name—Lake Chargoggagoggmanchauggauggagoggchaubunagungamaugg.  This lake has 49 letters in its name.  The lake’s name comes from a Nipmuck Indian word, which means, “You fish on your side, I fish on my side, nobody fishes in the middle.

Source: Rural Missouri

Someone Might Be An Inspiration

Do you know someone who has accomplished a great success later in life?  They can be an inspiration.  Orville Redenbacher is one such person.

My brother met Mr. Redenbacher on an airplane flight to Indianapolis, Indiana in the summer of 1973.  My brother was, and still is a farmer in Illinois.  He enjoyed visiting with Mr. Redenbacher, a friendly fellow-agriculturalist best known for his gourmet popcorn but with roots in the Extension Service.

You can read a lengthy 1981 interview of Orville Redenbacher at the Wyandot Popcorn Museum website (www.wyandotpopcornmus.com/orville.htm).  Here is what I found interesting about the man who graduated from Perdue and started his working life as a Vocational Agriculture teacher (1928/1929).

After teaching one year Orville took the job of Assistant County Extension Agent near Terre Haute, IN.  He was promoted to County Agent and served in that capacity until December 31, 1939.  He became a professional Farm Manager for Princeton Mining Company where he began his work with popcorn.

“Reddie” (Orville Redenbacher) spent many years researching and cultivating his popcorn until 1965 when his special variety popped bigger and better than other varieties.  He knew he had a good product but why couldn’t he sell it?  After years of trying to sell the corn under the label “Red Bow,” he hired a Chicago marketing firm.  They were the ones who advised him to call it “Orville Redenbacher’s Gourmet Popping Corn” and to put his own picture on the label.

In 1970 at the age of 63 he took the personal, direct approach and sent a case of his re-labeled popcorn to the home of Marshall Field’s gourmet-food department manager.  He called a month later and asked if they liked it.  The reply was, “We want to stock it.”  Continuing with the personal touch, Orville drove his pickup truck to Chicago and delivered the first load of his popcorn to the Marshall Field’s Department Store.  He even autographed the jars and was on Eye Witness News, Channel 5.  The Chicago Tribune put him in the Sunday Supplement.

Makes me wonder…might I (an Extension Service employee) follow Reddie’s footsteps and go on to market something as spectacular? 

Websites for Older Adults

www.rversonline.org A website without advertisements—what a novel idea!  An independent public service information resource, this site has thousands of pages on RV-related topics written by RVers for RVers. www.justwalk.com Enter your physical activity data and this site will give you progress reports and charts.  You can even be part of an exercise team.

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	Callaway County Extension callawayco@missouri.edu Last update: 03/16/12