Just depleted the last of the 529 plans...

[Anonymous]

Anonymous wrote:I my had $75 saved when my kid started school (~5 years ago). I was a single patent who had to start late and contributed modestly for the first couple of years.

Anyway, I was contributing a lot by the time she started college and continued that until her last year. (So, don’t think you have to have it all by their start).

My kid also got scholarships that paid about half of her tuition. Then, her last two years she won other awards that kicked in about 25K.

She got thru with no loans, and about $14,000 she could put towards grad school.

(This was at a small LAC in PA, which gives generous merit aid).

OMG $75K not $75 😂

[Anonymous]

Anonymous wrote:Oh wow- this really gives me hope. I put 5k (+2k each from a great grandparent) in each of my 3 kids accounts yearly and everyone yells at me saying it's not enough.

I too am okay paying the excess out of cash flow

well if you have the "income to pay excess out of cash flow" it can be better to invest now and let it grow tax free. At least up to the estimated cost of in-state for your kid. Hard to turn down the tax free growth IMO

[Anonymous]

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

Don't use a "my kid is Age 5 and you pick how to invest for me" fund. Pick 100% growth funds until your kid is 14/15, then start to move it to less riskier investments with 25% cutback each year as you get closer to needing the $.

DO that and you will average the SP500/market which is a lot more than 4-5%. I can get 4-5% with CDs/MM accounts currently.

[Anonymous]

Anonymous wrote:Thanks so much for sharing, OP! Still in the early years here doing $150 a month (DS is 3) and wondering if that's enough, but the daycare years make it tougher to swing more. Appreciate this perspective - congratulations to you and your children!

Daycare is $$$

I always commented to my friends that day was (even before/aftercare at the Y) at the time was more expensive than their in-state tuition. IF possible, don't spend the newfound money when daycare is over. Take a chunk you don't get anyhow, and direct it into college plan if you can.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

I absolutely agree. I feel like the fund managers should be called to task. They get sh!t returns compared to my 401k or any of my vanguard mutual fund investments. We're with VA529

That's not fair. They tell you the glide path, and you didn't have to choose the one matching the child's enrollment date. You could also have chosen any combination of stocks and bonds using the available funds.

Plus it's reasonable for retirement funds to be invested more aggressively because retirement is usually further away than college.

They switch from bonds to equities so quickly that the plans essentially earn nothing.

Oops, meant switch from equities to bonds so quickly that the plans essentially earn nothing.

I understand that. I'm just saying they tell you the asset allocations over time in advance, so I don't think they are to blame. You should invest according to your risk tolerance, not according to the investment name/target year.

NP. Even my bonds do better than my kids' 529 which is a mix of bonds and equity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

I absolutely agree. I feel like the fund managers should be called to task. They get sh!t returns compared to my 401k or any of my vanguard mutual fund investments. We're with VA529

That's not fair. They tell you the glide path, and you didn't have to choose the one matching the child's enrollment date. You could also have chosen any combination of stocks and bonds using the available funds.

Plus it's reasonable for retirement funds to be invested more aggressively because retirement is usually further away than college.

Totally agree! However, college funds should be aggressive until 3-4 years before college. Then start going less risky as you approach college, but keeping in mind that you have 3 years after they start college before you need to last 25%. So do what is risk appropriate for you, but really go aggressive until they are 14+ is the way to go.

In 2016, we knew Kid 1 was 2 years from college, we thought the market would tank with the election, so early Oct we pulled out 75% of Kid1 into less risky investments. Kept Kid 2 100% in aggressive/growth/market. Kid 2 (fully funded for $320K for college starting 6 years later) made $50K in 3 months and it kept growing afterwards. Now we had enough for Kid 1 to attend college of choosing, so we didn't need to be risky. We missed out on gains, but also missed out on potential major losses had market gone the other direction. Hence why we pulled it to "safer" investments.

But we lost out on great gains for them. However, we maintained principle and they had $250K for college when they started (they were never going to attend what is now an $85K+ school, so we planned for $60K/year)

[Anonymous]

Thank you for sharing OP!

[Anonymous]

Anonymous wrote:

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

Don't use a "my kid is Age 5 and you pick how to invest for me" fund. Pick 100% growth funds until your kid is 14/15, then start to move it to less riskier investments with 25% cutback each year as you get closer to needing the $.

DO that and you will average the SP500/market which is a lot more than 4-5%. I can get 4-5% with CDs/MM accounts currently.

Yes, but like other "average joe's" who don't spend time lurking in finance forums, we learned this the hard way and several years too late.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

Don't use a "my kid is Age 5 and you pick how to invest for me" fund. Pick 100% growth funds until your kid is 14/15, then start to move it to less riskier investments with 25% cutback each year as you get closer to needing the $.

DO that and you will average the SP500/market which is a lot more than 4-5%. I can get 4-5% with CDs/MM accounts currently.

Yes, but like other "average joe's" who don't spend time lurking in finance forums, we learned this the hard way and several years too late.

Didn't need to "lurk in a finance forum". A simple google for the last 20 years would inform you that you can self select your funds and that is the better approach. And that you want to keep it aggressively invested until a few years before college starts.
Same with 401K---you can be aggressive still when you are 40, because you have 20-25+ years before you will need that money.

[Anonymous]

Good job, OP! I started educational trusts (no 529s back then) when both of our children were born. I put all cash gifts to the kids in them and funded them regularly. But, life ensued. Fortunately, I had written the trust language so that the corpus could be used for educational needs along the way. Both kids were SN and needed endless testing, therapy, Exec coaches and tutors, psychiatrists and so on. By the time we hit college, the trusts had been depleted due to the SN needs. But thank heavens for in-state tuition in Virginia! Got both of them through. Full freight. Nothing from FAFSA. No merit. no financial aid but we did it. One is launched. Other in grad school which we are paying for out of savings and income. You did better than we did.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

Don't use a "my kid is Age 5 and you pick how to invest for me" fund. Pick 100% growth funds until your kid is 14/15, then start to move it to less riskier investments with 25% cutback each year as you get closer to needing the $.

DO that and you will average the SP500/market which is a lot more than 4-5%. I can get 4-5% with CDs/MM accounts currently.

Yes, but like other "average joe's" who don't spend time lurking in finance forums, we learned this the hard way and several years too late.

+1 I put it in the date targeted fund years ago, and the growth was tiny. I pulled some out recently and put it in an equity fund. Kicking myself.

[Anonymous]

Anonymous wrote:I my had $75 saved when my kid started school (~5 years ago). I was a single patent who had to start late and contributed modestly for the first couple of years.

Anyway, I was contributing a lot by the time she started college and continued that until her last year. (So, don’t think you have to have it all by their start).

My kid also got scholarships that paid about half of her tuition. Then, her last two years she won other awards that kicked in about 25K.

She got thru with no loans, and about $14,000 she could put towards grad school.

(This was at a small LAC in PA, which gives generous merit aid).

I'm projected to have about 75-80K with a similar profile (single parent). This gives me hope!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

Don't use a "my kid is Age 5 and you pick how to invest for me" fund. Pick 100% growth funds until your kid is 14/15, then start to move it to less riskier investments with 25% cutback each year as you get closer to needing the $.

DO that and you will average the SP500/market which is a lot more than 4-5%. I can get 4-5% with CDs/MM accounts currently.

Yes, but like other "average joe's" who don't spend time lurking in finance forums, we learned this the hard way and several years too late.

Didn't need to "lurk in a finance forum". A simple google for the last 20 years would inform you that you can self select your funds and that is the better approach. And that you want to keep it aggressively invested until a few years before college starts.
Same with 401K---you can be aggressive still when you are 40, because you have 20-25+ years before you will need that money.

dp.. so I thought the target funds 10 years out would be invested more aggressively. Turns out, I was wrong.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much return are folks getting in their 529s?

Feel like ours barely grows. We switched the equity distribution a year ago, as it seemed to switch to bonds waaaaay too quickly.

Still just about 4-5% now.

Only 40k for our 4th grader so far. We started late but are putting in $600 a month. Anticipate only having 2-3 years of state school saved at this rate.

Don't use a "my kid is Age 5 and you pick how to invest for me" fund. Pick 100% growth funds until your kid is 14/15, then start to move it to less riskier investments with 25% cutback each year as you get closer to needing the $.

DO that and you will average the SP500/market which is a lot more than 4-5%. I can get 4-5% with CDs/MM accounts currently.

Yes, but like other "average joe's" who don't spend time lurking in finance forums, we learned this the hard way and several years too late.

+1 I put it in the date targeted fund years ago, and the growth was tiny. I pulled some out recently and put it in an equity fund. Kicking myself.

OMG, me as well. I just switched at the top the year for my freshman.

[Anonymous]

Yep my TSP and 529s are 100% equities! I won't switch to bonds until very late in the game if at all depending on how things are.