Overfunded 529? What to do with the money?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just curious: How much did you save in the 529? Depending on where my kid goes to school and if any scholarships pop up, I could be in the same boat.

NP - We have 200K. We'll sit on it for grandkids (God willing). By then college will most likely be 200k a year anyway so they'll need all the help they can get.

200k not enough for 4 years of college. Tuition and room/board almost 90k right now at DC’s SLAC

It is enough for their child’s undergrad bc they didn’t apply to such an expensive school. Many of us think the value isn’t there.

Every one is different and that’s fine but if I literally had the money in a 529 and didn’t need it and my kid wanted to go to an expensive school that seemed right for them I would figure that’s what the money is for and not try to decide what the best “value” is.

I honestly think the best value is going to community college for two years but I am not going to sit on $200k and tell my kid to do that.

You need to myob. This is not what OP asked and your lecture is unnecessary.

[Anonymous]

Anonymous wrote:So the Roth has to be for the kid and not a parent? So no putting in my Roth?

Correct

[Anonymous]

Anonymous wrote:The cost of college is embarassing.

This. Ridiculous. We should be ashamed as a country.

[Anonymous]

Let's re-focus on the question that was asked. "We aren’t there yet but it looks like we won’t need all of the 529 funds set aside for dc (2 dc). I’ve already moved money as needed between my two children, but it still looks like we will have extra. What can be done?"

Suggestions include:
1) roll it into a Roth for the kids (question: can this be done for both of the DC?), my guess is yes if the 529 was set up for each DC
2) Save it for grandkids
3) Offset the amount of scholarships by removing it and saving it for post-college housing but possible tax ramifications for college student.

Our financial advisor kept a close eye on our funds - and stopped adding more investments to it once we had a sense of what we would need so we could have a more even balance of what was used and what was remaining. They recommended we use other investments to cover expenses like rent and travel (fly away school which adds up over 4 years).

[Anonymous]

Anonymous wrote:Just a note on the Roth. The kid will be allowed to remove some of the Roth money to pay for a new HOUSE! Only works on the first house purchase. But if you're imagining the Roth needs to be saved until retirement age, then this is a happy correction.

"Happy correction" if you are trying for a sub-optimal result. If the parents have money to burn, they should give or lend it to the kid for a house. Under absolutely no circumstances should a young adult take money out of a Roth for anything other than a dire emergency. You are foregoing decades of tax-free growth. That is true insanity.

[Anonymous]

I believe with the Roth conversion, you can only do $7k per year, so it would be a 5 year process to hit the $35K max. this is what we will do if DCs don't want to use it for graduate school.

[Anonymous]

Grad or professional school for #1 or #2.

Can also be transferred to a niece or nephew if either of you have any (and they could find a way to make that up to you or reimburse you with a gift).

[Anonymous]

Anonymous wrote:We aren’t there yet but it looks like we won’t need all of the 529 funds set aside for dc (2 dc). I’ve already moved money as needed between my two children, but it still looks like we will have extra. What can be done?

Grad school for sure. At some point one of them will most likely need it for an advanced degree.

[Anonymous]

Anonymous wrote:We aren’t there yet but it looks like we won’t need all of the 529 funds set aside for dc (2 dc). I’ve already moved money as needed between my two children, but it still looks like we will have extra. What can be done?

I am pp and will add you are NOT there yet. College costs can be a lot. Are you sure you have calculated properly?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We aren’t there yet but it looks like we won’t need all of the 529 funds set aside for dc (2 dc). I’ve already moved money as needed between my two children, but it still looks like we will have extra. What can be done?

I am pp and will add you are NOT there yet. College costs can be a lot. Are you sure you have calculated properly?

For instance our college says tuition is $60,000 plus once you add on meal plan, dorm etc.. it is actually $85,000 per year. That does not include books.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We aren’t there yet but it looks like we won’t need all of the 529 funds set aside for dc (2 dc). I’ve already moved money as needed between my two children, but it still looks like we will have extra. What can be done?

I am pp and will add you are NOT there yet. College costs can be a lot. Are you sure you have calculated properly?

For instance our college says tuition is $60,000 plus once you add on meal plan, dorm etc.. it is actually $85,000 per year. That does not include books.

Also if one or both study abroad in the summer you can pay for their classes with that money (not the lodging) but the classes. We just paid $3500 for summer class abroad.

[Anonymous]

I’d buy a car for myself.

[Anonymous]

Anonymous wrote:use it yourself, enroll in an italian cooking class in italy and use it for that.

There are only a limited number of schools outside the US that you can use 529 money for

[Anonymous]

Anonymous wrote:

Anonymous wrote:use it yourself, enroll in an italian cooking class in italy and use it for that.

There are only a limited number of schools outside the US that you can use 529 money for

You can still use it for a cooking class in Italy, you’ll just have to pay 10% penalty on any gains. You can withdraw the principal contributions without any tax issues.

[Anonymous]

You can transfer it to another child