529 Allocation

[Anonymous]

Anonymous wrote:The same money outside of 529, would be 1.2 million at minimum plus all the knowledge how you got there.
It's very hard to understand why you would even worry about money if you were willing to put so much money into account that has a low return compared to what it could be.
What's done is done. The kids are still young. Leave it alone. Don't touch most of it even when they start college. Downturns last under 2 years.
This is way too much money in such a restricted account unless they want to be doctors.

What in the world are you talking about? Account with low return?

[Anonymous]

Anonymous wrote:Don’t over contribute to 529.

If you can, why not? You can leave money in 529s forever. Your kids' kids' kids' kids' kids can benefit from your contributions if the money is untouched (and just imagine the compounding).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The same money outside of 529, would be 1.2 million at minimum plus all the knowledge how you got there.
It's very hard to understand why you would even worry about money if you were willing to put so much money into account that has a low return compared to what it could be.
What's done is done. The kids are still young. Leave it alone. Don't touch most of it even when they start college. Downturns last under 2 years.
This is way too much money in such a restricted account unless they want to be doctors.

You seem to be the same poster who keeps posting on all the 529 questions, and I just need to know…what is your deal? what state do you live in that your 529 options for index funds doesn’t return nearly the same as any regular index fund?

I live in DC. The fees are slightly higher than a Fidelity/Vanguard brokerage. But I get to deduct $8k in contributions each year from taxes AND anything the acct earns is tax free. I don’t know if you are in some impossibly low tax bracket that this doesn’t matter (hugely) or you are suggesting parents forgo tax savings yo bet it all on nvidia stock (which carries so much risk) or what? What is the thing that makes you think you were so right? Scholars at Brookings think 529 is so advantageous they want to take it away from high income earners who they think benefit too much. What do you know that those experts don’t?

Im not that poster, but i have MD 529 accounts with a target graduation date fund. Last I checked the fee was like 0.3%, which is higher than I would normally invest. But the 529 does beat a Roth for tax purposes with growth not taxed and taking the additional state deduction. Its a good deal.

Yes. I’m the pp. I am making the argument that 529s are highly beneficial.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Don’t over contribute to 529.

If you can, why not? You can leave money in 529s forever. Your kids' kids' kids' kids' kids can benefit from your contributions if the money is untouched (and just imagine the compounding).

Put that extra money in your own brokerage account. It may not be as tax advantaged but at least it doesn't have a ton of strings attached. We aren't contributing as much as we could to our kid's 529 because we only have one child, and we're not 100% sure that by the time he gets to college it will be worth $500k for a private college degree. In 10 years, it might be better to become a plumber and own your own company.

Also, our parents' generation had tons of siblings, tons of cousins. My brother has 1 child. DH's brother has 1 child, and his sister is childless. We're not sure there will be generations of kids and kids and kids to inherit the 529.