How to best save for college

HELP ME CLARK!
From HLN's Money Expert Clark Howard

SALLY:

My husband and I are expecting our first child later this year. We are both in our early 40s now, so we'll be 60 before our son goes to college. Would it be better to save in a 529 plan now, or save more in our current retirement plans which may have better tax consequences when we are retirement age and using the money for his education?

CLARK:

That is a very interesting question.

If you were to put money in a Roth account or instead put money in a 529 account - a 529 is used for college, tax-free, a Roth can be used for any purpose once you reach retirement age, tax-free – you do the Roth.

The reason you do the Roth is that if your child ends up getting a scholarship or, heaven forbid, ends up not going to college, the money in the 529 becomes taxable and is subject to penalty.

The Roth can be used for any purpose.

That's why it's a much higher priority to save the max each of you can in a Roth before you would do one penny in a 529.