How much in their 529?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We need to start. Have 1000 in an interest bearing savings account. How much are you adding per month? We are very much scraping by.

How about $100 a month? Can you manage that? By starting with some amount (maybe $2000?) then adding $208/month (state tax deduction of $2500/yr) all in the equity fund, my kid now has close to $200,000. If you can’t do $100/month, how about $50?

Single mom here...I do $75/month for each of my 16YOs (twins). My DD had to go to a special school for a year so I took $10k out of the 529 to help cover it so she has about $16k and my DS has about $26k. Not enough and am very worried!

I'm a single mom with a kid in college. What's your HHI? I had zero dollars saved for college because as a teacher, I didn't make enough to save other than for my retirement.

My kid got great merit aid for being a B student which brought the price of private schools down to the cost of a school like Towson or UMBC.

[Anonymous]

Anonymous wrote:Why couldn’t we have free universities here, sheesh.

Nothing is free. We pay for it in taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

Financial Samurai is a joke. Absolutely terrible with money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We need to start. Have 1000 in an interest bearing savings account. How much are you adding per month? We are very much scraping by.

How about $100 a month? Can you manage that? By starting with some amount (maybe $2000?) then adding $208/month (state tax deduction of $2500/yr) all in the equity fund, my kid now has close to $200,000. If you can’t do $100/month, how about $50?

Single mom here...I do $75/month for each of my 16YOs (twins). My DD had to go to a special school for a year so I took $10k out of the 529 to help cover it so she has about $16k and my DS has about $26k. Not enough and am very worried!

PP here with 58K for a 10th grader. I'm also a single mom and took out 10K years ago. I currently save 250/month and thats what I can afford. We will figure it out and having two college kids will help you at some schools.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

Just out of curiosity, why?

I understand choosing to put money in a 529 even if you are confident you could bankroll college with cash (which I'm betting you could whether you are retired or not). There are tax advantages to the 529 plus I do see benefit in setting money aside just for education just in case the worst happens, so you don't raid a kid's college fund for something else (I personally would not worry about this for myself but I get the logic here).

But I'm not sure why it matters if your kid's college fund is "fully funded" prior to your retirement or not, because presumably you will have a similar income in retirement as pre-retirement, won't you? Even if your income goes down, you won't be contributing to retirement anymore which will increase cashflow. If you also have a paid off house, then you should have tons of cash on hand.

We have money in a 529 but we don't fund anywhere near the gift amount each year and we don't view it as the only or even primary source of college funds. We aren't sure if we will retire before our kid starts college or not -- I think this is going to depend mostly on whether at that point in life we are excited to start the next phase of travel and freedom with our kid out of the house, or want to keep our jobs/lifestyle more steady to help ease the transition to empty nesting (possibly for both us and our kid -- I could see us wanting to keep things pretty similar the first year or two as we all adjust to the change of living apart). But it's not a financial decision. Our income in retirement will be about the same or could even be a little higher than pre-retirement. Some of this depends on the market, but I'm not worried that we need to worry about not having the funds to contribute an extra 20-30k in cash-on-hand to a tuition bill or other expenses whether we are retired or not. House will be paid off and our draw down amounts are set to approximate our pre-retirement income anyway.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

Financial Samurai is a joke. Absolutely terrible with money.

Assuming you are trying to be sarcastic. He's been retired since his early thirties and is now in his late 40s. On his blog, he describes that on his retirement/blogging income, he lives in a nice home in SF, sends his kids to private school, drives a Range Ranger, is a member of a private tennis club, has a ski condo in Lake Tahoe, vacations in Hawaii, and details his other investments. If you're a longtime FS reader, I can't interpret that statement as anything other than sarcasm.

If you're not being sarcastic, you do you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

Financial Samurai is a joke. Absolutely terrible with money.

Assuming you are trying to be sarcastic. He's been retired since his early thirties and is now in his late 40s. On his blog, he describes that on his retirement/blogging income, he lives in a nice home in SF, sends his kids to private school, drives a Range Ranger, is a member of a private tennis club, has a ski condo in Lake Tahoe, vacations in Hawaii, and details his other investments. If you're a longtime FS reader, I can't interpret that statement as anything other than sarcasm.

If you're not being sarcastic, you do you.

DP. How did he make his money that enabled him to retire in early 30s?

None of the stuff you list is an indication he's great with money. He could be, but it's not a given. I have several friends who became millionaires in their early 30s when SV companies they worked for went public. They would be the first to tell you they got lucky with timing. They've had to become reasonably smart with money quick because of the windfall and they all live lifestyles similar to what you are describing because they didn't make any stupid mistakes with their money. But they also are not the first people I'd go to in order to ask about something like 529 funding because their financial knowledge is specific to a fairly rare situation -- someone who comes into a very large amount of money early in their careers and can functionally retire and just invest in their 30s and 40s. Whereas I never had the windfall but instead have a steady income all those years. My approach to investing, saving for college, preparing for retirement, etc., is always going to be different than my friends because our finances are structured very different.

I would never be like "oh wow this person vacations in Hawaii and has a Range Rover, they must know everything there is to know about money and my specific financial situation."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

Just out of curiosity, why?

I understand choosing to put money in a 529 even if you are confident you could bankroll college with cash (which I'm betting you could whether you are retired or not). There are tax advantages to the 529 plus I do see benefit in setting money aside just for education just in case the worst happens, so you don't raid a kid's college fund for something else (I personally would not worry about this for myself but I get the logic here).

But I'm not sure why it matters if your kid's college fund is "fully funded" prior to your retirement or not, because presumably you will have a similar income in retirement as pre-retirement, won't you? Even if your income goes down, you won't be contributing to retirement anymore which will increase cashflow. If you also have a paid off house, then you should have tons of cash on hand.

We have money in a 529 but we don't fund anywhere near the gift amount each year and we don't view it as the only or even primary source of college funds. We aren't sure if we will retire before our kid starts college or not -- I think this is going to depend mostly on whether at that point in life we are excited to start the next phase of travel and freedom with our kid out of the house, or want to keep our jobs/D more steady to help ease the transition to empty nesting (possibly for both us and our kid -- I could see us wanting to keep things pretty similar the first year or two as we all adjust to the change of living apart). But it's not a financial decision. Our income in retirement will be about the same or could even be a little higher than pre-retirement. Some of this depends on the market, but I'm not worried that we need to worry about not having the funds to contribute an extra 20-30k in cash-on-hand to a tuition bill or other expenses whether we are retired or not. House will be paid off and our draw down amounts are set to approximate our pre-retirement income anyway.

We will have a smaller income in retirement than we do now, though we will have enough when we retire. Part of it is that I'm rigid with the bucket approach to finances, and the kids' education is at the top of my priority list after housing, food, and health care because my parents paid for all of my education. I feel a strong pull to pay it forward. Also, DH is a bigger spender than I am (not necessarily on himself, but on other family members), so it's important that college is segregated and can't be easily raided. If something happens and one of us dies early, their 529 plans are considered a completed gift, not a part of our estate. Also, if something happens and we get divorced, their college plans are fully funded, and I'm confident that we'd agree that they belong to the kids and do not need to be divided as a part of the marital estate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

Financial Samurai is a joke. Absolutely terrible with money.

Assuming you are trying to be sarcastic. He's been retired since his early thirties and is now in his late 40s. On his blog, he describes that on his retirement/blogging income, he lives in a nice home in SF, sends his kids to private school, drives a Range Ranger, is a member of a private tennis club, has a ski condo in Lake Tahoe, vacations in Hawaii, and details his other investments. If you're a longtime FS reader, I can't interpret that statement as anything other than sarcasm.

If you're not being sarcastic, you do you.

DP. How did he make his money that enabled him to retire in early 30s?

None of the stuff you list is an indication he's great with money. He could be, but it's not a given. I have several friends who became millionaires in their early 30s when SV companies they worked for went public. They would be the first to tell you they got lucky with timing. They've had to become reasonably smart with money quick because of the windfall and they all live lifestyles similar to what you are describing because they didn't make any stupid mistakes with their money. But they also are not the first people I'd go to in order to ask about something like 529 funding because their financial knowledge is specific to a fairly rare situation -- someone who comes into a very large amount of money early in their careers and can functionally retire and just invest in their 30s and 40s. Whereas I never had the windfall but instead have a steady income all those years. My approach to investing, saving for college, preparing for retirement, etc., is always going to be different than my friends because our finances are structured very different.

I would never be like "oh wow this person vacations in Hawaii and has a Range Rover, they must know everything there is to know about money and my specific financial situation."

The indication that he's good with money comes from reading his blog. He worked in finance before retiring in his early thirties. I won't rewrite his blog, which dates back to 2009 for you. Read it yourself.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:13-year-old: $350k (stopped contributions, moved to conservative allocation)
6-year-old: $164k (100% in a broad index fund)

Doesn’t look like you know what you’re doing. $350K is what you should have for a 17-year-old, maximum. You obviously over contributed, which is essentially a gross miscalculation and sunk cost.

They have a 6 yo whom they can transfer any "excess". So as long as they stop contributing to the 6yo account soon, this isn't an issue.

I will not stop contributing to the six-year-old's 529 plan until they have 95% of the cost of attendance at our alma matter. Financial Samurai does a nice job describing why overcontributing to a 529 plan is not a "gross miscalculation and sunk cost": https://www.financialsamurai.com/what-to-do-with-leftover-money-in-a-529-plan/

We value education and started contributing to the gift tax exclusion to each kid's 529 plans at birth, even when it hurt because we also needed a nanny. Now we're further in our careers, and it doesn't hurt anymore to allocate $18k per year to the six-year-old's 529 account. We'll most likely be retired before they start college, and we'd prefer to have it fully funded prior to retiring.

“We value education.” So do a lot of people who can’t afford to contribute tons of money.

[Anonymous]

I have 23k total for a 17 year old, 15 year old and 13 year old. The 17 year old is unlikely to graduate high school at this point.

[Anonymous]

13 years old, almost $90k.

[Anonymous]

Anonymous wrote:I have 23k total for a 17 year old, 15 year old and 13 year old. The 17 year old is unlikely to graduate high school at this point.

Oh gosh, i'm sorry. That must be stressful.

[Anonymous]

Anonymous wrote:Don't be so quick to brag. You have to report it on fafsa and will bring down your score in their formula as to how much financial aid you'll get.

It's really sucky. You're making sacrifices for years to save for your kids' college tuitions only to have it be held against when they view it as an "asset".

Most privates don't hold reasonable savings against you by that much.

We saved about 100k for each kid by 1st year of college and had another 80k in savings and got decent FA for LACs and T15s.

We did equity fund for one and started in a targeted for the 2nd, then realized how sluggish it was, so added a S&P 500 index. Timing on that wasn't great, but it rebounded. Overall have done very well.

Income is a far greater factor for FA.