What would you do with extra money?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, low cost total stock market index fund. Park it and forget about.

So almost no one has suggested maxing out the 529 (15k per kid per year). This kind of makes sense to me, because that would be a lot of our HHI into a fund with limited use. And like the other poster said, we could potentially want to move, although I am pretty comfortable with where we live now and we have a lot of space.

Maxing out a 529 would be 30k per year per child for a married couple. How much are you on track to have in your 529 when your dd graduates from high school? Will you need more than that to pay for college? If so then it does make sense to increase the amount you are saving.

I find this so tricky to estimate. My kids have tuition remission at UMD, which I am inclined to encourage them to take advantage of should they get in. If they want to do an expensive program like med school or law school I would be happy to help. But what if they just go to UMD and that’s the end of it? Or should I plan as if they are going to the most expensive schools and put as much as I can afford in the 529? What if I want to invest in something else? I am just clueless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, low cost total stock market index fund. Park it and forget about.

So almost no one has suggested maxing out the 529 (15k per kid per year). This kind of makes sense to me, because that would be a lot of our HHI into a fund with limited use. And like the other poster said, we could potentially want to move, although I am pretty comfortable with where we live now and we have a lot of space.

Maxing out a 529 would be 30k per year per child for a married couple. How much are you on track to have in your 529 when your dd graduates from high school? Will you need more than that to pay for college? If so then it does make sense to increase the amount you are saving.

I find this so tricky to estimate. My kids have tuition remission at UMD, which I am inclined to encourage them to take advantage of should they get in. If they want to do an expensive program like med school or law school I would be happy to help. But what if they just go to UMD and that’s the end of it? Or should I plan as if they are going to the most expensive schools and put as much as I can afford in the 529? What if I want to invest in something else? I am just clueless.

That is tricky because it isn't in hand. If something happens and whoever is employed there is laid off, or goes somewhere else, or becomes disabled and has to leave that job, then the benefit will go away. I would probably save at least enough to cover the other stuff 529s can cover - Room and board, books (you should check this) and then save in taxable investing whatever is left over. If you aren't already maxing IRAs then think that is actually something to do as well. Do Roth IRAs (either directly or by back door) and then you can pull the contributions out if you ever needed to with no penalties.

[Anonymous]

Actually and sorry I didn't notice that you weren't funding ROTH IRAs already. If you don't have traditional IRAs already, then you would do the backdoor ROTH (it seems like you are over the income limits for straight ROTH) and put money in non deductible IRAs and then immediately convert them to ROTHs.

No one has asked for your HHI and age and how much you have in retirement total, but if you are on track for retirement, it makes sense to fund the ROTHs each year instead of putting more money in to 529s when you have a tuition benefit. It gives you more flexibility.

[Anonymous]

Anonymous wrote:Actually and sorry I didn't notice that you weren't funding ROTH IRAs already. If you don't have traditional IRAs already, then you would do the backdoor ROTH (it seems like you are over the income limits for straight ROTH) and put money in non deductible IRAs and then immediately convert them to ROTHs.

No one has asked for your HHI and age and how much you have in retirement total, but if you are on track for retirement, it makes sense to fund the ROTHs each year instead of putting more money in to 529s when you have a tuition benefit. It gives you more flexibility.

^^^ more money meaning over and above the annual contribution that gives you a state tax benefit

Also remember than money left in your kids' 529s can go on to their children.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, low cost total stock market index fund. Park it and forget about.

So almost no one has suggested maxing out the 529 (15k per kid per year). This kind of makes sense to me, because that would be a lot of our HHI into a fund with limited use. And like the other poster said, we could potentially want to move, although I am pretty comfortable with where we live now and we have a lot of space.

Maxing out a 529 would be 30k per year per child for a married couple. How much are you on track to have in your 529 when your dd graduates from high school? Will you need more than that to pay for college? If so then it does make sense to increase the amount you are saving.

I find this so tricky to estimate. My kids have tuition remission at UMD, which I am inclined to encourage them to take advantage of should they get in. If they want to do an expensive program like med school or law school I would be happy to help. But what if they just go to UMD and that’s the end of it? Or should I plan as if they are going to the most expensive schools and put as much as I can afford in the 529? What if I want to invest in something else? I am just clueless.

I'm all for state schools, but if I lived in Maryland, I would seriously beef up the college fund. I'm in Virginia and my kids are 9 & 12 and currently have 200k set aside for each kid. I do not contribute any longer and hopefully that will grow. Hopefully my kids will get in one of the great VA schools, but competition is very tight. UMD is a pretty low bar IMO.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, low cost total stock market index fund. Park it and forget about.

So almost no one has suggested maxing out the 529 (15k per kid per year). This kind of makes sense to me, because that would be a lot of our HHI into a fund with limited use. And like the other poster said, we could potentially want to move, although I am pretty comfortable with where we live now and we have a lot of space.

Maxing out a 529 would be 30k per year per child for a married couple. How much are you on track to have in your 529 when your dd graduates from high school? Will you need more than that to pay for college? If so then it does make sense to increase the amount you are saving.

I find this so tricky to estimate. My kids have tuition remission at UMD, which I am inclined to encourage them to take advantage of should they get in. If they want to do an expensive program like med school or law school I would be happy to help. But what if they just go to UMD and that’s the end of it? Or should I plan as if they are going to the most expensive schools and put as much as I can afford in the 529? What if I want to invest in something else? I am just clueless.

That is tricky because it isn't in hand. If something happens and whoever is employed there is laid off, or goes somewhere else, or becomes disabled and has to leave that job, then the benefit will go away. I would probably save at least enough to cover the other stuff 529s can cover - Room and board, books (you should check this) and then save in taxable investing whatever is left over. If you aren't already maxing IRAs then think that is actually something to do as well. Do Roth IRAs (either directly or by back door) and then you can pull the contributions out if you ever needed to with no penalties.

According to the UMD tuition remission policy, if you have worked for the university over 5 years (DH has worked there 10), you are eligible for the tuition remission even after leaving from the university system. So unless the policy drastically changes, he could leave and still be eligible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Actually and sorry I didn't notice that you weren't funding ROTH IRAs already. If you don't have traditional IRAs already, then you would do the backdoor ROTH (it seems like you are over the income limits for straight ROTH) and put money in non deductible IRAs and then immediately convert them to ROTHs.

No one has asked for your HHI and age and how much you have in retirement total, but if you are on track for retirement, it makes sense to fund the ROTHs each year instead of putting more money in to 529s when you have a tuition benefit. It gives you more flexibility.

^^^ more money meaning over and above the annual contribution that gives you a state tax benefit

Also remember than money left in your kids' 529s can go on to their children.

No, we fully fund the Roth IRAs, which we can do because we max out 2 401k plans and a 457b (I know the 401k is called something different for a non profit but I forget). That's 3x19,000 this year so it takes out a pretty huge chunk of our HHI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Actually and sorry I didn't notice that you weren't funding ROTH IRAs already. If you don't have traditional IRAs already, then you would do the backdoor ROTH (it seems like you are over the income limits for straight ROTH) and put money in non deductible IRAs and then immediately convert them to ROTHs.

No one has asked for your HHI and age and how much you have in retirement total, but if you are on track for retirement, it makes sense to fund the ROTHs each year instead of putting more money in to 529s when you have a tuition benefit. It gives you more flexibility.

^^^ more money meaning over and above the annual contribution that gives you a state tax benefit

Also remember than money left in your kids' 529s can go on to their children.

No, we fully fund the Roth IRAs, which we can do because we max out 2 401k plans and a 457b (I know the 401k is called something different for a non profit but I forget). That's 3x19,000 this year so it takes out a pretty huge chunk of our HHI.

403B?

Sorry that I missed that you are already fully funding ROTHS!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, low cost total stock market index fund. Park it and forget about.

So almost no one has suggested maxing out the 529 (15k per kid per year). This kind of makes sense to me, because that would be a lot of our HHI into a fund with limited use. And like the other poster said, we could potentially want to move, although I am pretty comfortable with where we live now and we have a lot of space.

Maxing out a 529 would be 30k per year per child for a married couple. How much are you on track to have in your 529 when your dd graduates from high school? Will you need more than that to pay for college? If so then it does make sense to increase the amount you are saving.

I find this so tricky to estimate. My kids have tuition remission at UMD, which I am inclined to encourage them to take advantage of should they get in. If they want to do an expensive program like med school or law school I would be happy to help. But what if they just go to UMD and that’s the end of it? Or should I plan as if they are going to the most expensive schools and put as much as I can afford in the 529? What if I want to invest in something else? I am just clueless.

That is tricky because it isn't in hand. If something happens and whoever is employed there is laid off, or goes somewhere else, or becomes disabled and has to leave that job, then the benefit will go away. I would probably save at least enough to cover the other stuff 529s can cover - Room and board, books (you should check this) and then save in taxable investing whatever is left over. If you aren't already maxing IRAs then think that is actually something to do as well. Do Roth IRAs (either directly or by back door) and then you can pull the contributions out if you ever needed to with no penalties.

According to the UMD tuition remission policy, if you have worked for the university over 5 years (DH has worked there 10), you are eligible for the tuition remission even after leaving from the university system. So unless the policy drastically changes, he could leave and still be eligible.

That is great! I haven't worked for a university that is that generous.

[Anonymous]

maxing out 529 tax advantage =/= enough for college

def. put it in 529

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, low cost total stock market index fund. Park it and forget about.

So almost no one has suggested maxing out the 529 (15k per kid per year). This kind of makes sense to me, because that would be a lot of our HHI into a fund with limited use. And like the other poster said, we could potentially want to move, although I am pretty comfortable with where we live now and we have a lot of space.

Maxing out a 529 would be 30k per year per child for a married couple. How much are you on track to have in your 529 when your dd graduates from high school? Will you need more than that to pay for college? If so then it does make sense to increase the amount you are saving.

I find this so tricky to estimate. My kids have tuition remission at UMD, which I am inclined to encourage them to take advantage of should they get in. If they want to do an expensive program like med school or law school I would be happy to help. But what if they just go to UMD and that’s the end of it? Or should I plan as if they are going to the most expensive schools and put as much as I can afford in the 529? What if I want to invest in something else? I am just clueless.

I'm all for state schools, but if I lived in Maryland, I would seriously beef up the college fund. I'm in Virginia and my kids are 9 & 12 and currently have 200k set aside for each kid. I do not contribute any longer and hopefully that will grow. Hopefully my kids will get in one of the great VA schools, but competition is very tight. UMD is a pretty low bar IMO.

OP here. I went to an elite college AND an elite law school and was utterly miserable at both, and my career is so-so, which I can only admit on this anon website. DH went to a no-name school in a foreign country no less, has no graduate degree, and makes more, has better benefits, loves his job. So I wonder if my hesitance to hoard money for college (despite my instinct to hoard money period) is incorrectly colored by my crappy experience. Should I hoard money in the 529 or wait for a better investment opportunity elsewhere? How much of the 50k should I put in the 529? I don't know what will be the right thing for my kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, low cost total stock market index fund. Park it and forget about.

So almost no one has suggested maxing out the 529 (15k per kid per year). This kind of makes sense to me, because that would be a lot of our HHI into a fund with limited use. And like the other poster said, we could potentially want to move, although I am pretty comfortable with where we live now and we have a lot of space.

Maxing out a 529 would be 30k per year per child for a married couple. How much are you on track to have in your 529 when your dd graduates from high school? Will you need more than that to pay for college? If so then it does make sense to increase the amount you are saving.

I find this so tricky to estimate. My kids have tuition remission at UMD, which I am inclined to encourage them to take advantage of should they get in. If they want to do an expensive program like med school or law school I would be happy to help. But what if they just go to UMD and that’s the end of it? Or should I plan as if they are going to the most expensive schools and put as much as I can afford in the 529? What if I want to invest in something else? I am just clueless.

That is tricky because it isn't in hand. If something happens and whoever is employed there is laid off, or goes somewhere else, or becomes disabled and has to leave that job, then the benefit will go away. I would probably save at least enough to cover the other stuff 529s can cover - Room and board, books (you should check this) and then save in taxable investing whatever is left over. If you aren't already maxing IRAs then think that is actually something to do as well. Do Roth IRAs (either directly or by back door) and then you can pull the contributions out if you ever needed to with no penalties.

According to the UMD tuition remission policy, if you have worked for the university over 5 years (DH has worked there 10), you are eligible for the tuition remission even after leaving from the university system. So unless the policy drastically changes, he could leave and still be eligible.

That is great! I haven't worked for a university that is that generous.

UMD has fantastic benefits and I highly recommend it as an employer. It blows the federal government (my employer) out of the water.

[Anonymous]

I am starting to think this is as a troll post. Every suggestion comes back with a response of how they've already done something. Seems unlikely at age 34 even for a prudent saver. The response about the kid having an obscure illness was the tip off.

[Anonymous]

Anonymous wrote:I am starting to think this is as a troll post. Every suggestion comes back with a response of how they've already done something. Seems unlikely at age 34 even for a prudent saver. The response about the kid having an obscure illness was the tip off.

I can assure you I am not a troll! Jeff can attest to that if you want! Why are you surprised that in a post where I am wondering what to do about a big chunk of money that I have saved, that I have exhausted all of the really obvious answers such as roth ira and maxing out 401k? The post about my child's illness was just answering the question- I can't have another child.

And I am not just a "prudent" saver, people in my family think DH and I are nuts. We don't vacation, we don't buy luxuries of any sort, we DIY everything, our house is in a very modest area, all of our furniture is used, we don't eat out. My birthday splurge was a $30 set of containers for my pantry (that I am very excited about). A lot of people would be utterly miserable living the way we do, but it's just the way we are. The money adds up! It happens! My real dilemma is how much to put in a 529, the last tax advantaged account available to me.

[Anonymous]

I would buy an investment property with it. Put down some money, use some to fix it up and rent it out.