Opinion-Are we on track?

[Anonymous]

The savingforcollege.com calculator says you are on track for 80% of a private school tuition for your son.

ASSUMPTIONS:
Private College
No grants or loans
7% college tuition inflation until your 8 year old attends for 4 years
$120k current savings
$1250/month additional savings
Investments grow at 7% annually

RESULTS:
Total cost of college $571k
Your savings $458k
Potential savings gap $113k

https://www.savingforcollege.com/calculators/college-savings-calculator

[Anonymous]

Anonymous wrote:OP here. Thanks for your input. We are older parents (we adopted him at 49 and 51, cue the gasps and judgement) so we are getting near retirement. We have 4 mil in retirement accounts plus our primary home and an investment property that we AirBnB. We are putting the max into our 401Ks, so over 60K per year betweent he two of us. I'm a fed so I will have a pension of about 80K (at least) when I retire plus SS.

I was asking because I'm seeing people talk about how full-pay at some places is 100K now, I just want to make sure my son can go to wherever he wants/gets into. These all seem to be such crazy numbers. I graduated law school from a state school and I was only paying 3500 per year in tuition in 1993.

Weird thing to say. Why would you think that? I think it’s a win-win solution for your kid and you.

[Anonymous]

529s are over rated. The only advantage is tax free growth. It’s great to have a big balance in it, we have around the same for each child roughly the same age. But, it doesn’t need to be the only source of college funds. A plain old brokerage account allows for a lot more flexibility, more investment options (than most state plans), and you’ll be paying the LTCG rate on the gains. I wouldn’t over think it and put anymore you would save in the 529 into long term investments in a brokerage account.

[Anonymous]

"I graduated law school from a state school and I was only paying 3500 per year in tuition in 1993."

I graduated a State College in 1983 when tuition was still costing me $350/semester. The GI Bill paid me $311/mth, which was over half of what I was paid as an active-duty Sergeant in the US Army before discharge.

Karma caught up with me though. I had 2 kids later in life that literally cost me all my liquid savings through advanced degrees.

My only advice to others; Never stash your cash under the mattress and let inflation eat it. Always be invested in the Market or Real Estate and remember it's time in the market and not trying to time the market.

[Anonymous]

Anonymous wrote:529s are over rated. The only advantage is tax free growth. It’s great to have a big balance in it, we have around the same for each child roughly the same age. But, it doesn’t need to be the only source of college funds. A plain old brokerage account allows for a lot more flexibility, more investment options (than most state plans), and you’ll be paying the LTCG rate on the gains. I wouldn’t over think it and put anymore you would save in the 529 into long term investments in a brokerage account.

529s are also state tax deductible.

And now you can do a Roth rollover in your kids name with any remaining balance.

[Anonymous]

Anonymous wrote:529s are over rated. The only advantage is tax free growth. It’s great to have a big balance in it, we have around the same for each child roughly the same age. But, it doesn’t need to be the only source of college funds. A plain old brokerage account allows for a lot more flexibility, more investment options (than most state plans), and you’ll be paying the LTCG rate on the gains. I wouldn’t over think it and put anymore you would save in the 529 into long term investments in a brokerage account.

Incorrect. 529s are triple tax advantaged - state tax deduction on contributions, tax deferred growth, and tax-free withdrawals for educational expenses (and now also for Roth contributions).