529 Money --Too Much?

[Anonymous]

For "worst case," I guess out of state + graduate degree(s), how much would you plan on per child in a 529?

[Anonymous]

A question I've been wondering about. Also, what happens when you've got "too much."

[Anonymous]

If you have too much it can be used for another child or grandchild. There are limits as to how much you or you and your spouse can put in at one time. I think you can do 5 years of gifting at one time or $140,000 per couple. I'm not sure what the max is over time.

How much in total is a different question. Age and total cost are the keys plus a base rate of return

[Anonymous]

Anonymous wrote:A question I've been wondering about. Also, what happens when you've got "too much."

It can pass to other family members. Just don't want tons over. I could still have if a kid went to a state school or got a scholarship but I'm willing to be way over for that).

[Anonymous]

OP here: guess of an amt anyone?

[Anonymous]

How old is your child? Tuition seems to be going up, so figured for five years hence will not suffice for fifteen years hence. And what graduate school? Law, medical, business, Ph.D. in something, master's degree...?

[Anonymous]

$5,500 per year..

I was 32 when my child was born (and when I opened the 529), and plan to retire at 65. So that gives me 33 years of needing the state tax deduction (which is the real benefit of a 529 plan).

In Virginia, you have unlimited carry-forward, but I am not going to fund a 529 after he graduates from grad school, so my assumption is I will stop funding when he is 24.

So $4,000 x 33 years is $132k. This is my maximum lifetime state tax deduction. $132k/24 years is $5500 per year.

I'll spend the 529 first, then cash flow and/or take from my Roth IRA or other, taxable investments.

[Anonymous]

I have about $275k for one kid (older by 2 yrs) and abt $225k for other. I guess I'll equal them up but would you stop? I know that could sound ridiculous but if your kid picked out of state, tuition alone is 45-50k a year so the money is essentially gone on tuition in 4-5 years even without graduate school.

[Anonymous]

For child's 529, we will meet the maximum investment, currently $370k with Vanguard. If child doesn't use all the funds, the funds will remain available for child's future children.

We are also using other saving vehicles for child's future expenses, but your question pertains to 529.

[Anonymous]

Anonymous wrote:For child's 529, we will meet the maximum investment, currently $370k with Vanguard. If child doesn't use all the funds, the funds will remain available for child's future children.

We are also using other saving vehicles for child's future expenses, but your question pertains to 529.

Thanks...this is what I was leaning towards. I think it is likely that at least one would go for advanced degrees, or so I hope. I'm not concerned about other expenses. We can handle them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For child's 529, we will meet the maximum investment, currently $370k with Vanguard. If child doesn't use all the funds, the funds will remain available for child's future children.

We are also using other saving vehicles for child's future expenses, but your question pertains to 529.

Thanks...this is what I was leaning towards. I think it is likely that at least one would go for advanced degrees, or so I hope. I'm not concerned about other expenses. We can handle them.

Op, if you have the ability to set aside $370k for your child's education, did you really even need to ask the question? Jeez.

[Anonymous]

Anonymous wrote:I have about $275k for one kid (older by 2 yrs) and abt $225k for other. I guess I'll equal them up but would you stop? I know that could sound ridiculous but if your kid picked out of state, tuition alone is 45-50k a year so the money is essentially gone on tuition in 4-5 years even without graduate school.

We stopped when we had $140,000 for each kid. We're in VA. Sure enough, our oldest chose a state school. I would be wary of overfunding unless you have a large family. We also do not intend to fund grad school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For child's 529, we will meet the maximum investment, currently $370k with Vanguard. If child doesn't use all the funds, the funds will remain available for child's future children.

We are also using other saving vehicles for child's future expenses, but your question pertains to 529.

Thanks...this is what I was leaning towards. I think it is likely that at least one would go for advanced degrees, or so I hope. I'm not concerned about other expenses. We can handle them.

Op, if you have the ability to set aside $370k for your child's education, did you really even need to ask the question? Jeez.

I'm sorry, I didn't realize only certain questions were allowed on this board. The answer is that the money can pass to grandchildren so there is a purpose to keep doing it or not.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have about $275k for one kid (older by 2 yrs) and abt $225k for other. I guess I'll equal them up but would you stop? I know that could sound ridiculous but if your kid picked out of state, tuition alone is 45-50k a year so the money is essentially gone on tuition in 4-5 years even without graduate school.

We stopped when we had $140,000 for each kid. We're in VA. Sure enough, our oldest chose a state school. I would be wary of overfunding unless you have a large family. We also do not intend to fund grad school.

Did you put in $140k or are you counting the interest in that amount?

[Anonymous]

Anonymous wrote:$5,500 per year..

I was 32 when my child was born (and when I opened the 529), and plan to retire at 65. So that gives me 33 years of needing the state tax deduction (which is the real benefit of a 529 plan).

In Virginia, you have unlimited carry-forward, but I am not going to fund a 529 after he graduates from grad school, so my assumption is I will stop funding when he is 24.

So $4,000 x 33 years is $132k. This is my maximum lifetime state tax deduction. $132k/24 years is $5500 per year.

I'll spend the 529 first, then cash flow and/or take from my Roth IRA or other, taxable investments.

The real benefit of a 529 plan is tax deferred growth. State deduction is a rounding error.

We have one kid. Currently 7 but we are stuffing it full and will pass the balance to his kids if we can. Currently have about 250K in there.

We see it as a generational tax shelter.