How much in their 529?

[Anonymous]

$77k for 5 year old
newborn - hoping to put $20k in this year

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

Just out of curiosity, why?

I understand choosing to put money in a 529 even if you are confident you could bankroll college with cash (which I'm betting you could whether you are retired or not). There are tax advantages to the 529 plus I do see benefit in setting money aside just for education just in case the worst happens, so you don't raid a kid's college fund for something else (I personally would not worry about this for myself but I get the logic here).

But I'm not sure why it matters if your kid's college fund is "fully funded" prior to your retirement or not, because presumably you will have a similar income in retirement as pre-retirement, won't you? Even if your income goes down, you won't be contributing to retirement anymore which will increase cashflow. If you also have a paid off house, then you should have tons of cash on hand.

We have money in a 529 but we don't fund anywhere near the gift amount each year and we don't view it as the only or even primary source of college funds. We aren't sure if we will retire before our kid starts college or not -- I think this is going to depend mostly on whether at that point in life we are excited to start the next phase of travel and freedom with our kid out of the house, or want to keep our jobs/D more steady to help ease the transition to empty nesting (possibly for both us and our kid -- I could see us wanting to keep things pretty similar the first year or two as we all adjust to the change of living apart). But it's not a financial decision. Our income in retirement will be about the same or could even be a little higher than pre-retirement. Some of this depends on the market, but I'm not worried that we need to worry about not having the funds to contribute an extra 20-30k in cash-on-hand to a tuition bill or other expenses whether we are retired or not. House will be paid off and our draw down amounts are set to approximate our pre-retirement income anyway.

We will have a smaller income in retirement than we do now, though we will have enough when we retire. Part of it is that I'm rigid with the bucket approach to finances, and the kids' education is at the top of my priority list after housing, food, and health care because my parents paid for all of my education. I feel a strong pull to pay it forward. Also, DH is a bigger spender than I am (not necessarily on himself, but on other family members), so it's important that college is segregated and can't be easily raided. If something happens and one of us dies early, their 529 plans are considered a completed gift, not a part of our estate. Also, if something happens and we get divorced, their college plans are fully funded, and I'm confident that we'd agree that they belong to the kids and do not need to be divided as a part of the marital estate.

Sound planning. Well done, PP.

[Anonymous]

4 year old: $60k
2 year old: $37k
Plus an additional $8k for the 3rd child that was put into the 529 when my wife was pregnant but she miscarried.

We do $8k per year per child, the market has been kind.

[Anonymous]

We have approx. $230k saved in 529s for each kid: 10th, 7th and 5th grades plus 30 months of GI benefits. HHI is recently $450k so we are trying to decide what’s the best use of the GI benefits versus saving more for college in 529s. Would love to pay for undergrad with 529s and save GI benefits for grad school—equally divided among the three kids.

[Anonymous]

Why do we insist on this model for health insurance and education in this country?

My friends child is in college in Europe and they pay only room/board for them. There is a “you have to work here” requirement for some time period upon grad. But then healthcare will be free.

And here we are scrimping every penny for the same things.

[Anonymous]

Anonymous wrote:Why do we insist on this model for health insurance and education in this country?

My friends child is in college in Europe and they pay only room/board for them. There is a “you have to work here” requirement for some time period upon grad. But then healthcare will be free.

And here we are scrimping every penny for the same things.

We as a society have decided that higher education and anything but life saving healthcare should be allocated based on ability to pay. This has resulted in the best (and costliest) health care for those with money and the best (and costliest) higher education for those with money.

Other societies have decided that these are not things that should be distributed based on ability to pay.

[Anonymous]

Anonymous wrote:Why do we insist on this model for health insurance and education in this country?

My friends child is in college in Europe and they pay only room/board for them. There is a “you have to work here” requirement for some time period upon grad. But then healthcare will be free.

And here we are scrimping every penny for the same things.

Agree, saving money to go to what should not be this outrageous cost is the same highway robbery like how much I pay here in mortgage interest! Typical banks get rich taking advantage of the market. Universities getting rich on the backs of the average unsuspecting college student (unless already come from money).

[Anonymous]

19 and 20. 600K and 500K. We use 529s to reduce estate tax. If kids don’t use for graduate school they can change beneficiary to their kids.

[Anonymous]

College senior, tuition all paid, about 35k remaining in 529. Had about 350k before college.

[Anonymous]

Anonymous wrote:High School Junior ~$145k
8th Grader ~$125k

As the poster that necroposted the thread after almost 2 weeks fallow, it's been fun reading.

Goal is to have around $200k for oldest including contributions during college and $220k for the youngest. I figure $50k/yr is reasonable for solid, but not top 20 LAC. If she gets in to something better that doesn't give us merit aid, we'll fund the difference out of regular income. I'm not expecting any need based aid - $340k AGI.

[Anonymous]

We had 200K in one and 150 in the other when #1 started college (second one is now a senior).

[Anonymous]

Anonymous wrote:We had 200K in one and 150 in the other when #1 started college (second one is now a senior).

just to add to this: we did not restrict their choices and so some is financed by cash flow and some by the 529.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why do we insist on this model for health insurance and education in this country?

My friends child is in college in Europe and they pay only room/board for them. There is a “you have to work here” requirement for some time period upon grad. But then healthcare will be free.

And here we are scrimping every penny for the same things.

Agree, saving money to go to what should not be this outrageous cost is the same highway robbery like how much I pay here in mortgage interest! Typical banks get rich taking advantage of the market. Universities getting rich on the backs of the average unsuspecting college student (unless already come from money).

You all realize someone pays right? with taxes?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why do we insist on this model for health insurance and education in this country?

My friends child is in college in Europe and they pay only room/board for them. There is a “you have to work here” requirement for some time period upon grad. But then healthcare will be free.

And here we are scrimping every penny for the same things.

We as a society have decided that higher education and anything but life saving healthcare should be allocated based on ability to pay. This has resulted in the best (and costliest) health care for those with money and the best (and costliest) higher education for those with money.

Other societies have decided that these are not things that should be distributed based on ability to pay.

100%

[Anonymous]

College junior: 150k currently, should finish with 130k remaining (state public)

8th grader: 135k