Anyone a 529 millionaire?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With the recent run up in the market our Virginia 529s for our two children have now surpassed $1M. Anyone else in this situation? We superfunded the 529s not long after birth and after 5 years started adding to the 529 to continue the Virginia state tax deduction. Oldest child starts college in 3 years. Nothing fancy….just put the funds into the Total Stock Index Fund.

Wow. Did you invest in individual stocks?

Reading comprehension---it literally stated "just put the funds into the Total Stock Index Fund"

Thanks for the feedback. Just signed up for an online reading comprehension class. You're a life saver.

Can a 529 be used to fund that?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is why I funded the minimum to send my kids in state. And I modified the stupidly low assumptions on growth that they had in their calculators, given that I invested all in stocks. What a hassle to have that amount of money left over in a 529.

Depends, for us we plan to help with grad school and any future grandkids or our kids/spouses grad school, so the 529 is just a great way to get tax free growth and to not need to invest as much capital to make it happen. Imagine 25+ years of growth to help fund college

Are you extremely wealthy? As in you don’t need to work and could live off your investments? Because we are high earners and I’m certainly not continuing to work to pay for future grandkids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No. It sounds to me like you overfunded. If you are very high net worth it doesn’t matter. But unless they go to the most expensive schools for undergrad and grad school I am not sure you will be able to spend this.

We had about $250k each, and my kids are now going to undergrads where they get almost free rides, so I wish we had saved less…

But if they do go to a Top school, those are $85K+ currently. My kid is at one. It's 5K+ more each year. So it will be $100K/year by the time his first kid enters college and at least $110K+ by their senior year. They could easily use $400K+ for just undergrad. Or they are well funded for a lower cost undergrad and all of PT/Med/Dental/Law/Professional Grad school.

But the time the younger goes to college (guessing at least 5+ years before starting), they could use up $450K+ for just undergrad.

Fact is, if you are targeting Top schools, very few give full rides.

Also, if you can fund them like this, they are likely High Income/higher net worth. So anything left can just be passed to the grandkids.

Just curious why you are capitalizing Top schools? In your mind is it an official thing?

Also, I wouldn’t count your eggs before they hatch when it comes to grandchildren. Many of the kids st these Top schools are not really breeding material.

If you managed it somehow, there truly is no bar.

[Anonymous]

Anonymous wrote:No. It sounds to me like you overfunded. If you are very high net worth it doesn’t matter. But unless they go to the most expensive schools for undergrad and grad school I am not sure you will be able to spend this.

We had about $250k each, and my kids are now going to undergrads where they get almost free rides, so I wish we had saved less…

+1 I am intentionally holding back now. With kid getting a free ride, I don’t need a whopping 529.

[Anonymous]

We were in same position, but somewhat deliberately to fund private college for four kids. We ended up with enough for college plus med school for one and some left over.

OP, how much did you seed the accounts with? We would love to do this for our grandchildren.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No - because my husband doesn’t love 529 as an investment vehicle and we did not super fund it for that reason. We don’t want to have more in there than they would need for college. And, if we keep money in our own name but invested - we can still put it towards college.

Why doesn’t your husband like 529s? Sure you can keep money in your own name in other investment vehicles but you don’t get the same tax benefits when used toward education expenses.

+1 The tax free growth is huge. Don't understand why you wouldn't at least aim to fund In-State total costs for your kids with 529s. Then if truly concerned, put rest in regular investing.
Given the money can be used for college/trade schools/etc we knew that our kids would be using it for something (turns out it's college for all of them).

+2. The tax-free growth is huge for us as well (six-figures of untaxed growth). I also like segregating savings and keeping college illiquid, so we didn't use the kids' college funds to remodel a house or buy a new range rover when the temptation was there.

[Anonymous]

Anonymous wrote:With the recent run up in the market our Virginia 529s for our two children have now surpassed $1M. Anyone else in this situation? We superfunded the 529s not long after birth and after 5 years started adding to the 529 to continue the Virginia state tax deduction. Oldest child starts college in 3 years. Nothing fancy….just put the funds into the Total Stock Index Fund.

What's the purpose of posing this humblebrag disguised as a question?

[Anonymous]

My aunt is. She super contributed at birth to all her grand kids then did max gift each year. Been doing it since 2001

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is why I funded the minimum to send my kids in state. And I modified the stupidly low assumptions on growth that they had in their calculators, given that I invested all in stocks. What a hassle to have that amount of money left over in a 529.

Depends, for us we plan to help with grad school and any future grandkids or our kids/spouses grad school, so the 529 is just a great way to get tax free growth and to not need to invest as much capital to make it happen. Imagine 25+ years of growth to help fund college

Are you extremely wealthy? As in you don’t need to work and could live off your investments? Because we are high earners and I’m certainly not continuing to work to pay for future grandkids.

Why? You are not really thinking clearly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No. It sounds to me like you overfunded. If you are very high net worth it doesn’t matter. But unless they go to the most expensive schools for undergrad and grad school I am not sure you will be able to spend this.

We had about $250k each, and my kids are now going to undergrads where they get almost free rides, so I wish we had saved less…

+1 I am intentionally holding back now. With kid getting a free ride, I don’t need a whopping 529.

If your child wins a scholarship, you are allowed to make a withdrawal from the 529 in an equivalent amount. You will pay taxes on the growth, but avoid the penalties. It would be no different than you investing money in a typical brokerage account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No - because my husband doesn’t love 529 as an investment vehicle and we did not super fund it for that reason. We don’t want to have more in there than they would need for college. And, if we keep money in our own name but invested - we can still put it towards college.

Why doesn’t your husband like 529s? Sure you can keep money in your own name in other investment vehicles but you don’t get the same tax benefits when used toward education expenses.

We use it - but we would rather have less in there than we need than more (because we can cover it other ways). He doesn't like the limited uses for it - and prefers to have more control. To each his own, though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is why I funded the minimum to send my kids in state. And I modified the stupidly low assumptions on growth that they had in their calculators, given that I invested all in stocks. What a hassle to have that amount of money left over in a 529.

Depends, for us we plan to help with grad school and any future grandkids or our kids/spouses grad school, so the 529 is just a great way to get tax free growth and to not need to invest as much capital to make it happen. Imagine 25+ years of growth to help fund college

Sure - if you plan for all of that but I don't feel I have enough free money around for that rn.

[Anonymous]

Anonymous wrote:No - because my husband doesn’t love 529 as an investment vehicle and we did not super fund it for that reason. We don’t want to have more in there than they would need for college. And, if we keep money in our own name but invested - we can still put it towards college.

You should probably take control of the family finances if your husband prefers to pay taxes on his earnings vs tax free.

[Anonymous]

Way to go OP!

Study abroad could be an option along with graduate school.

No need to be a merit chaser!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is why I funded the minimum to send my kids in state. And I modified the stupidly low assumptions on growth that they had in their calculators, given that I invested all in stocks. What a hassle to have that amount of money left over in a 529.

Depends, for us we plan to help with grad school and any future grandkids or our kids/spouses grad school, so the 529 is just a great way to get tax free growth and to not need to invest as much capital to make it happen. Imagine 25+ years of growth to help fund college

Are you extremely wealthy? As in you don’t need to work and could live off your investments? Because we are high earners and I’m certainly not continuing to work to pay for future grandkids.

We still work, but yes, we could easily retire and live off all our investments. And do so maintaining our desired lifestyle. For example, our "cash equivalent" (CD/Treasuries/MM/etc) earned us over $1M last year.

But even before we hit that level and were just "high income" we knew we wouldn't mind leaving $50K or so in each kid's 529 if they didn't use it. Now that we are wealthy, yes we plan to help our future grandkids educational needs, and the tax benefits of a 529 are too good to pass up. We can't take it with us. We certainly won't spend it all (just not in our nature--we already have 2 newly renovated/new homes that are fully paid for, so we are set for retirement). So rather than gifting our kids/grandkids $5M+ when we die, it will be much better used when they are in their 20/30s and the GK are young