“Fully Funded College”

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How is putting money in a college fund have anything to do with a gift tax? Never worried about it and put $10-30K per year in.

Gift tax applies to transfers of funds to any person, including your children. In fact, particularly your children. It's intended to prevent people from circumventing estate taxes by giving their kids $$ before they die. There is one special exemption that allows you to put $70,000 in a 509, but it has to be spread over 5 years, so I'm not sure that it really changes much. If you give someone an amount over the gift tax limit and don't pay the gift tax or file to apply against your exclusion, you are violating the law. You probably won't get caught unless you get an IRS audit.

The money in a 529 is still considered to be the parent's.

This. The money in my kids VA 529 is in my name, right of survivorship, DH. It is on behalf of my kids. But, I could transfer it to another family member if I chose (which I would not). Nothing in a 529 vests in the kids and they have no control over the money. So it is not a gift.

Not true according to my tax accountant. We put about $50k in each kid’s account last year and had to file paperwork with the IRS to apply to their exclusion.

Gift tax liability is distinct from account ownership.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Many of you are INSANE. We do not have a ton of money and has always focused our money into retirement. My son went to nova and got his associates, we paid as he went. He transferred to UVA for year 3&4 and got a partial academic scholarship, we also paid the difference as he went. He had a job before he even graduated up in Reston at a tech company that he started last week with a starting salary of 85k. Got that job through the UVA network. So so glad we were never wealthy enough to afford private. My son is in an incredible spot thanks to state schools.

Thank for you sharing this. It's been shocking to hear posters calling people horrible parents, just because they can't put away thousands of dollars a month for each of their kids' college years. Or the truly crazy ones, calling people trolls for daring to give one kid slightly more money than another.

Still haven't heard a good defense for giving one kid more $$ than another. And while I agree sweating the details down to the last penny is silly, the PP you're referencing offered the example of providing one kid $85k and another $100k. That's not slightly more, imo. It would be trivially simple to just give both kids $92.5k.

But what happens when the first kid was already given $100k, the market goes down soon afterwards, and when DC#2 starts college their account only has $15k? Not everyone has the extra cash in their back pocket.

It's true that a severe market crash could make it tough, but a couple things. #1 you shouldn't be so heavily invested in risky assets within a year or 2 of college anyway. #2 if that happened to me, I'd find a way to true up kid #2. I'm not gonna just shrug and ask my kid to absorb the market risk. Even if I don't have it in my back pocket, I'd true up kid #2 over time.

But the original premise was several kids, maybe three - going to college 4-8 years apart. So your "risky assets" attack doesn't fly. And you're gonna find a way to "true up" kid #2? Well what about kid #3? Where's this magic money coming from? Are you pulling from your 401k, or taking equity out of the house to make sure these kids get exactly the same amount? And if you're that anal about it, are you accounting for inflation for kids spaced 8 years apart?

One simple way to true them up over time would be to just continue diverting the amount you were putting into their 529 account, even after they've attended college. If there was room in your budget when they were 0-18, there's still room in your budget when they're 18+. I'd keep doing that as long as it took to even things out. And yeah, I will account for inflation, roughly, though not to the exact $.01.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Many of you are INSANE. We do not have a ton of money and has always focused our money into retirement. My son went to nova and got his associates, we paid as he went. He transferred to UVA for year 3&4 and got a partial academic scholarship, we also paid the difference as he went. He had a job before he even graduated up in Reston at a tech company that he started last week with a starting salary of 85k. Got that job through the UVA network. So so glad we were never wealthy enough to afford private. My son is in an incredible spot thanks to state schools.

Thank for you sharing this. It's been shocking to hear posters calling people horrible parents, just because they can't put away thousands of dollars a month for each of their kids' college years. Or the truly crazy ones, calling people trolls for daring to give one kid slightly more money than another.

Still haven't heard a good defense for giving one kid more $$ than another. And while I agree sweating the details down to the last penny is silly, the PP you're referencing offered the example of providing one kid $85k and another $100k. That's not slightly more, imo. It would be trivially simple to just give both kids $92.5k.

But what happens when the first kid was already given $100k, the market goes down soon afterwards, and when DC#2 starts college their account only has $15k? Not everyone has the extra cash in their back pocket.

It's true that a severe market crash could make it tough, but a couple things. #1 you shouldn't be so heavily invested in risky assets within a year or 2 of college anyway. #2 if that happened to me, I'd find a way to true up kid #2. I'm not gonna just shrug and ask my kid to absorb the market risk. Even if I don't have it in my back pocket, I'd true up kid #2 over time.

But the original premise was several kids, maybe three - going to college 4-8 years apart. So your "risky assets" attack doesn't fly. And you're gonna find a way to "true up" kid #2? Well what about kid #3? Where's this magic money coming from? Are you pulling from your 401k, or taking equity out of the house to make sure these kids get exactly the same amount? And if you're that anal about it, are you accounting for inflation for kids spaced 8 years apart?

One simple way to true them up over time would be to just continue diverting the amount you were putting into their 529 account, even after they've attended college. If there was room in your budget when they were 0-18, there's still room in your budget when they're 18+. I'd keep doing that as long as it took to even things out. And yeah, I will account for inflation, roughly, though not to the exact $.01.

You seem to know a lot about PP's budget in the year 2034...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Many of you are INSANE. We do not have a ton of money and has always focused our money into retirement. My son went to nova and got his associates, we paid as he went. He transferred to UVA for year 3&4 and got a partial academic scholarship, we also paid the difference as he went. He had a job before he even graduated up in Reston at a tech company that he started last week with a starting salary of 85k. Got that job through the UVA network. So so glad we were never wealthy enough to afford private. My son is in an incredible spot thanks to state schools.

Thank for you sharing this. It's been shocking to hear posters calling people horrible parents, just because they can't put away thousands of dollars a month for each of their kids' college years. Or the truly crazy ones, calling people trolls for daring to give one kid slightly more money than another.

Still haven't heard a good defense for giving one kid more $$ than another. And while I agree sweating the details down to the last penny is silly, the PP you're referencing offered the example of providing one kid $85k and another $100k. That's not slightly more, imo. It would be trivially simple to just give both kids $92.5k.

But what happens when the first kid was already given $100k, the market goes down soon afterwards, and when DC#2 starts college their account only has $15k? Not everyone has the extra cash in their back pocket.

It's true that a severe market crash could make it tough, but a couple things. #1 you shouldn't be so heavily invested in risky assets within a year or 2 of college anyway. #2 if that happened to me, I'd find a way to true up kid #2. I'm not gonna just shrug and ask my kid to absorb the market risk. Even if I don't have it in my back pocket, I'd true up kid #2 over time.

But the original premise was several kids, maybe three - going to college 4-8 years apart. So your "risky assets" attack doesn't fly. And you're gonna find a way to "true up" kid #2? Well what about kid #3? Where's this magic money coming from? Are you pulling from your 401k, or taking equity out of the house to make sure these kids get exactly the same amount? And if you're that anal about it, are you accounting for inflation for kids spaced 8 years apart?

One simple way to true them up over time would be to just continue diverting the amount you were putting into their 529 account, even after they've attended college. If there was room in your budget when they were 0-18, there's still room in your budget when they're 18+. I'd keep doing that as long as it took to even things out. And yeah, I will account for inflation, roughly, though not to the exact $.01.

You seem to know a lot about PP's budget in the year 2034...

¯\_(?)_/¯

PP asked how I would true up my second kid. I answered.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Many of you are INSANE. We do not have a ton of money and has always focused our money into retirement. My son went to nova and got his associates, we paid as he went. He transferred to UVA for year 3&4 and got a partial academic scholarship, we also paid the difference as he went. He had a job before he even graduated up in Reston at a tech company that he started last week with a starting salary of 85k. Got that job through the UVA network. So so glad we were never wealthy enough to afford private. My son is in an incredible spot thanks to state schools.

Thank for you sharing this. It's been shocking to hear posters calling people horrible parents, just because they can't put away thousands of dollars a month for each of their kids' college years. Or the truly crazy ones, calling people trolls for daring to give one kid slightly more money than another.

Still haven't heard a good defense for giving one kid more $$ than another. And while I agree sweating the details down to the last penny is silly, the PP you're referencing offered the example of providing one kid $85k and another $100k. That's not slightly more, imo. It would be trivially simple to just give both kids $92.5k.

But what happens when the first kid was already given $100k, the market goes down soon afterwards, and when DC#2 starts college their account only has $15k? Not everyone has the extra cash in their back pocket.

It's true that a severe market crash could make it tough, but a couple things. #1 you shouldn't be so heavily invested in risky assets within a year or 2 of college anyway. #2 if that happened to me, I'd find a way to true up kid #2. I'm not gonna just shrug and ask my kid to absorb the market risk. Even if I don't have it in my back pocket, I'd true up kid #2 over time.

But the original premise was several kids, maybe three - going to college 4-8 years apart. So your "risky assets" attack doesn't fly. And you're gonna find a way to "true up" kid #2? Well what about kid #3? Where's this magic money coming from? Are you pulling from your 401k, or taking equity out of the house to make sure these kids get exactly the same amount? And if you're that anal about it, are you accounting for inflation for kids spaced 8 years apart?

One simple way to true them up over time would be to just continue diverting the amount you were putting into their 529 account, even after they've attended college. If there was room in your budget when they were 0-18, there's still room in your budget when they're 18+. I'd keep doing that as long as it took to even things out. And yeah, I will account for inflation, roughly, though not to the exact $.01.

You seem to know a lot about PP's budget in the year 2034...

¯\_(?)_/¯

PP asked how I would true up my second kid. I answered.

You also assume that if PP has room in her budget in year X, she must have that same room in year Y. That's quite an assumption. And I think PP was asking a rhetorical question, alluding to the ridiculousness of trying to give each and every kid the same amount of money adjusted for inflation over a 5-10 year period.