No Option But Education

A Twitter listener asks what can be done with an ESA if a child decides not to go to college. Dave says you'll have to pay a 15% penalty plus your tax rate to get the money back.

QUESTION: A Twitter listener asks what can be done with an ESA if a child decides not to go to college. Dave says you’ll have to pay a 15% penalty plus your tax rate to get the money back.

ANSWER: I think you have to shoot the kid, because you’re going to get killed. You’ve got a 15% penalty plus your tax rate. The government’s going to take well over half your money.

What we told our children was they had to go to school, and it really wasn’t an option. So we brainwashed them. “This is your college fund. This is your college fund. This is your college fund.” That’s why an ESA makes sense. If your whole family is not committed to the importance of getting an education, then you shouldn’t be saving money in an ESA. Should every child on the planet go to college? No. But is it okay for them to? Sure. Are they all college material? No. But you can use the Education Savings Account to advance their education. That’s what I’m going to be doing. You can do vo-tech or other stuff. This idea that “I think I’m just going to go party, and we’re going to give the government half this money because I don’t have a better plan”—no, I think I’ll pass on that one. I don’t think that’s a good plan at all.