if money were limitless + 529s question

[Anonymous]

We have $335,000 in a 529 for my DS (who is still 4 years away from college).

As I recall, we'll pay a tax on the earnings when it's time to tap into it.

Also, if our DS doesn't use all of it for tuition, there is a 10 percent penalty to withdraw the funds. But perhaps it's worth it to get a down payment on a house. Our DS is motivated to make the most of an in-state university (but we're OK with a private college or university too).

[Anonymous]

Anonymous wrote:If money is limitless you just pay as you go.

Yes. We contribute 2500 per parent per kid per year. For the tax benefit. We will pay the rest when the time comes.

[Anonymous]

Anonymous wrote:We have $335,000 in a 529 for my DS (who is still 4 years away from college).

As I recall, we'll pay a tax on the earnings when it's time to tap into it.

Also, if our DS doesn't use all of it for tuition, there is a 10 percent penalty to withdraw the funds. But perhaps it's worth it to get a down payment on a house. Our DS is motivated to make the most of an in-state university (but we're OK with a private college or university too).

not if you used for intended purpose. at least not in MD

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If money is limitless you just pay as you go.

Right.

Nobody cares about tax free growth. I am sure that the limitless money was originally made with poor investment decisions.

Makes no sense. I'm wealthy but still frugal.

If money are limitless why would I do 529 with its investment options.

[Anonymous]

Our financial planner had us stop at $120,000. Save the rest of the money in a more flexible iinstrument.

[Anonymous]

Anonymous wrote:We have $335,000 in a 529 for my DS (who is still 4 years away from college).

As I recall, we'll pay a tax on the earnings when it's time to tap into it.

Also, if our DS doesn't use all of it for tuition, there is a 10 percent penalty to withdraw the funds. But perhaps it's worth it to get a down payment on a house. Our DS is motivated to make the most of an in-state university (but we're OK with a private college or university too).

I'm curious why you decided to invest so much in a 529. Are you planning to cover grad school also?

[Anonymous]

What if you have multiple 529s - is there a cap? We have $120K each in VA 529, eight semesters of VA tuition prepaid for each, and $150K each in private college prepaid 529. Total value probably about $350K each. Do we have to stop contributing?

[Anonymous]

OP here. Accounts are with College America. Here is what they say:

The account(s) per children max out at 500k. if you did a lump sum contribution, it would be 250k max at one time.
The maximum total contribution limit is $500,000 for each beneficiary. The $500,000-per-beneficiary limit applies across all plans administered by Virginia529, including CollegeAmerica, Virginia529 inVEST?, Virginia529 prePAID? and CollegeWealth. Multiple accounts for the same beneficiary will be combined to determine if the maximum contribution amount has been reached.
 
 Once the total account balance (including any earnings) reaches $500,000, we will not accept additional contributions or rollovers. If the total account value is below $500,000, you can contribute regardless of how much you have already contributed.
 
So there you go...it is more than $250k in VA.