College savings

[Anonymous]

There are so many calculators and blogs about this with different information. I can seem to get a sense of how much we should be saving or whether we are on track. We have a 3 yr old and a newborn. 3 yr old has $40k in 529 and newborn has $17k. We plan to fund around $15k per year until age 18. Will we be on track to cover private or public plus grad school? Outside of a 529 should we buy bonds for the kids?

[Anonymous]

Your plan is fine. Who knows what's going to change in the next 15-18 years or even how relevant college will be in the age of AI and automation.

[Anonymous]

we save about this much per child per year with the expectation that it will cover out of state tuition at a public 4-year school. Your starting balances are probably higher than ours were at similar ages so maybe you're closer to being on track for private? I dunno.

We regularly assess whether to up our contributions and decide against because we don't expect to be in a worse financial position when our kids are in college than we are now, so we're comfortable funding some of their education out of our then-current income if needed. Feels like the right balance between being prepared and flexible to us.

[Anonymous]

Anonymous wrote:we save about this much per child per year with the expectation that it will cover out of state tuition at a public 4-year school. Your starting balances are probably higher than ours were at similar ages so maybe you're closer to being on track for private? I dunno.

We regularly assess whether to up our contributions and decide against because we don't expect to be in a worse financial position when our kids are in college than we are now, so we're comfortable funding some of their education out of our then-current income if needed. Feels like the right balance between being prepared and flexible to us.

We took the same approach. You are ahead of where we were when the kids were little because we didn't really start college savings until they were in elementary (and childcare costs reduced). They are both in college now and we did meet our goal of having 4 years of state U saved in each kid's 529. By then we were also making more and could cash flow additional if it seemed justified, but that ended up not being needed. One picked a lower cost state U and will have a bit left to put towards grad school. The other picked a private college with scholarship that fit our state U budget. All worked out fine.

[Anonymous]

You seem on track op

[Anonymous]

$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

[Anonymous]

We did open 529s but quickly realized it made more sense to keep investing in our favorite stocks. 18 years later, we have enough to send both kids to any college they choose. The oldest costs us 65K a year, at a 85K institution (merit aid). We'll see what the second kid goes. Then there's grad school or downpayment for a house, etc.

PP is delusional, BTW. It's true that for a minority of people like us, who lucked out with their stock picks, yes, dividends are enough to pay for college without dipping into the capital. But that's only if your stock selection works out wonderfully, and only if the market is mostly bullish in the decades you invest. And of course, if means that if you had other plans for that money, well too bad, it's eaten by college costs. Most of the time, this strategy won't provide dividends that can pay for 100% of college... but it will pay a portion, and if you sell stocks, it can pay for all.

Something to think about. When Apple is at a 52 week low, consider buying.

[Anonymous]

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

I wouldn't put my 14 year old's money in it but not an unreasonable choice if you are starting savings with a baby. They also have target date funds that gradually shift to more conservative investments, 85% stock to start with. I was just pointing out that is an option in response to the PP who said you can't invest for growth in a 529.

[Anonymous]

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

What do you suggest? You just say don’t use a 529 invest elsewhere without any explanation or where or what to invest in.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

Yes but the whole reward for 529s comes from the tax free growth so total stock market is a great fund in the child's early years

[Anonymous]

Is a Target date fund or something more aggressive best when starting out with 17l investment in 529 for an newborn?

[Anonymous]

*17k

[Anonymous]

Any opinions on MD’s 529 plan? Can we invest in total stock market index like the VA one? How are the target date funds there?