“Fully Funded College”

[Anonymous]

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Anonymous wrote:I have about $300k per child in each 529. I stopped bc my financial advisor said it would be better to just pay cash for any overage at this point. I figured I’m fully funded then between what it costs and what I’ll owe as I have the funds. That said, unless I’m talking to my spouse, I’ve or on this post, ive never said the words fully funded college funds with regard to our kids. Who talks like that about their own kids to others??

Wow PP. You are very fortunate. We'll be lucky if we can save $100k for each of our 3 kids. I know we'll get to that for one, and maybe/probably two. The third will be a stretch. No way we can afford to send them to any school they want, all expenses paid. We can definitely help, but they'll have to make some real adult decisions on how to cover the rest: military service, taking out loans, doing community college for two years & transferring, etc etc

Wait, your plan is to give your first two kids more than your third, and just tell the third kid to make some "real adult decisions" in order to cover the shortfall? You can't be serious.

Well the kids are spaced several years apart. So we have a better estimate on what the oldest child will have available at age 18. But based on our jobs/the market/unforeseen circumstances, that number is harder to estimate for the youngest child. But even if the oldest gets $100k and the youngest $85k, is that so unfair? It's life. And again, based on only having $100k each all THREE will have to make decisions on how to "fully fund" college. I apologize for not having as much money as you seem to have.

The comment about "apologizing" for not having as much money is a total deflection. The point isn't HOW MUCH you are saving, it's that you're saving more for some of your kids than you are for others. It would be trivially simple for you to just "even things up" and gift each of your kids the same amount. Why not do that?

If you aren't a lying troll, then you're a jerk and a bad parent. You deserve the unhappiness and resentment that is surely coming your way.

You sound insane. The kid is going to be "unhappy and resentful" because he got $85,000 and his sister got $100k? Sorry, I don't raise my kids to assign that kind of value to money. We're open about what we can and cannot afford. And you seem to have trouble with simple math: We're not saving "more" for some kids over others. But I'll put it in terms you can understand (maybe): Susie was born first. We started saving for her first. Johnny was born last. Hence, we started putting money away for him after Susie. Right now there is more money in Susie's account. I cannot predict how much money we will earn over the next 10 years. Neither can I predict the returns in these 529 accounts. Therefore, I cannot guarantee that when Johnny turns 18 he will have exactly as much money as Susie had 5 years earlier. Lying troll out!

Why not just even out their accounts? It'd be pretty simple to do.

But I think what PP is saying is, he/she has a limited amount of money. So to get DC3 caught up with DC1 & DC2, they'd have to reduce contributions to their first two kids, which doesn't seem smart considering they're much closer to college than the youngest child. Maybe I'm missing something, we only have two kids but they're 3 years apart and we have different balances in their accounts.

[Anonymous]

Because the funds can be moved back and forth I consider the kids 529 accounts all one pot. Although the balances are different, we will make sure they each get the same amount.

[Anonymous]

Anonymous wrote:Because the funds can be moved back and forth I consider the kids 529 accounts all one pot. Although the balances are different, we will make sure they each get the same amount.

But is there is any space between your children, how do you even this out? My kids will go consecutively to college, so I will never have two in at the same time, thus my younger will have less in his account at the time his sibling starts college because he was born 4 years later so we've been saving longer for the older one, but, depending on the market, things might look different 4 years later. So if I have $50k/year for the oldest, but then 4 years later the younger's account has done better, I might have $60k/year in that. Are you saying 1.) you would only give the younger $50k/year because that's what the older got or b.) you'd somehow split the overage and distribute half to the older child? What happens if one of your kids gets a full ride somewhere, do you then divide your 529 savings by your number of kids and give the one that got the right a lump sum of their "share?"

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because the funds can be moved back and forth I consider the kids 529 accounts all one pot. Although the balances are different, we will make sure they each get the same amount.

But is there is any space between your children, how do you even this out? My kids will go consecutively to college, so I will never have two in at the same time, thus my younger will have less in his account at the time his sibling starts college because he was born 4 years later so we've been saving longer for the older one, but, depending on the market, things might look different 4 years later. So if I have $50k/year for the oldest, but then 4 years later the younger's account has done better, I might have $60k/year in that. Are you saying 1.) you would only give the younger $50k/year because that's what the older got or b.) you'd somehow split the overage and distribute half to the older child? What happens if one of your kids gets a full ride somewhere, do you then divide your 529 savings by your number of kids and give the one that got the right a lump sum of their "share?"

I'd split the overage, after accounting for inflation (so, in your example, if the younger kids' college costs $10k more, I'd call it even). If one of my kids gets a full ride, yes I'm gonna gift them their share of the 529 money. (You can do this penalty free if you get a scholarship).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because the funds can be moved back and forth I consider the kids 529 accounts all one pot. Although the balances are different, we will make sure they each get the same amount.

But is there is any space between your children, how do you even this out? My kids will go consecutively to college, so I will never have two in at the same time, thus my younger will have less in his account at the time his sibling starts college because he was born 4 years later so we've been saving longer for the older one, but, depending on the market, things might look different 4 years later. So if I have $50k/year for the oldest, but then 4 years later the younger's account has done better, I might have $60k/year in that. Are you saying 1.) you would only give the younger $50k/year because that's what the older got or b.) you'd somehow split the overage and distribute half to the older child? What happens if one of your kids gets a full ride somewhere, do you then divide your 529 savings by your number of kids and give the one that got the right a lump sum of their "share?"

I'd split the overage, after accounting for inflation (so, in your example, if the younger kids' college costs $10k more, I'd call it even). If one of my kids gets a full ride, yes I'm gonna gift them their share of the 529 money. (You can do this penalty free if you get a scholarship).

Huh. Interesting. Well, you’re a nicer parent than I am. I don’t actually consider the 529s my kids’ money. We don’t put gifts they receive in them, it all comes out of our earnings. So to me, if one child gets a scholarship, then we are in a better position to assist both children with graduating debt free.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because the funds can be moved back and forth I consider the kids 529 accounts all one pot. Although the balances are different, we will make sure they each get the same amount.

But is there is any space between your children, how do you even this out? My kids will go consecutively to college, so I will never have two in at the same time, thus my younger will have less in his account at the time his sibling starts college because he was born 4 years later so we've been saving longer for the older one, but, depending on the market, things might look different 4 years later. So if I have $50k/year for the oldest, but then 4 years later the younger's account has done better, I might have $60k/year in that. Are you saying 1.) you would only give the younger $50k/year because that's what the older got or b.) you'd somehow split the overage and distribute half to the older child? What happens if one of your kids gets a full ride somewhere, do you then divide your 529 savings by your number of kids and give the one that got the right a lump sum of their "share?"

I'd split the overage, after accounting for inflation (so, in your example, if the younger kids' college costs $10k more, I'd call it even). If one of my kids gets a full ride, yes I'm gonna gift them their share of the 529 money. (You can do this penalty free if you get a scholarship).

Huh. Interesting. Well, you’re a nicer parent than I am. I don’t actually consider the 529s my kids’ money. We don’t put gifts they receive in them, it all comes out of our earnings. So to me, if one child gets a scholarship, then we are in a better position to assist both children with graduating debt free.

NP here. I think this is fine if the scholarship is to the child's first choice school and they are not pressured to take it out of economics.

[Anonymous]

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Anonymous wrote:Most people underestimate cost.

Amherst this fall is around 90k

Amherst is between $75k and $80k.

Why do people want to sent their kids so far away? Apart from instate tuition I want my kids to go to school in VA so they are close by and settle in VA after college and marry someone from around here. I want my kids and grandkids nearby.

Holy crap. Talk about boundary issues. What a nightmare you are/will be, PP.

She sounds smart to me. Be a good parent and your kids will want to stay close.

Its up to the kid where they want to go -- I'm not sure how parents can control that exactly....

+1
I have wonderful parents. The best thing they ever did for me was instill the idea that the whole world is open to me.

[Anonymous]

I have 3 kids who are spaced out in age and decent but not unlimited funds. Our first will go to college in 2 years. We're handling it like this: we decided we would fund the approximately cost of an in-state public school for each of our kids. We estimate this is around 30-35 K and that we can cash flow about 15k of that each year she's in school, so that leaves us needing 80k in a 529 plan for her. We almost at that point in her account, so extra savings go in the next kids' funds. I think if you estimate a rough goal (like our fund total in-state public costs for each kid, or if you have less, fund tuition at an in-state public) and think of the 529 plan and cash flow during the college years in tandem, it's a relatively easy to balance things out. Like if one kid's fund happens in a stock market boom, you just cash flow less and use the savings to fill up the next kid's account (or spend on other stuff if they are the youngest).

That is what we can reasonably handle when we look at our financial picture, savings rate and the estimating gains in investments--and it will likely mean different dollar amounts for each kid depending on inflation, which (if any) in-state public school they attend. We're in VA so that price will vary if they choose to go to, say JMU (currently around 26K total cost of attendance) or W&M (nearly 39k cost of attendance in state). If a kid wants to go to W&M she may have to take on a work/study job, add summer savings, and prior savings and maybe take on a small amount of debt. If she chooses out of state or private, she'll get that same 30-35k so she'll need to find merit aid or hope that financial aid supplements our contribution. But if one kids opts for W&M and the other for JMU it's not like I feel the JMU student deserves 13k more a year because her school was cheaper. They wanted, needed and valued different things. I think trying to "even things out" between your kids on a dollar level goes down a weird road, but thinking ahead to what you can reasonably manage that seems equitable across children and letting them know that is the plan is the best you can do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If DC goes to a professional school, it's easily financed and will/should pay for itself. Why would a parent pay for an MBA/JD/MD when the whole point is to get a job that will pay big dividends? If he decides to take a socially redeeming job afterwards, we could always help with loan repayments.

If DC chooses academia/PhD program, he'll get paid to go, but not enough to live very well. So I'm sure we'll slip spending money his way. But, that's small change and doesn't require 18 years of financial prep.

I think it depends. I have an employee who is headed to Ross (Michigan) for his MBA in the fall. He makes $115k + 20% bonus. For him, I suspect it is more about the experience and finding a job he loves, than about a $200k+ paycheck.

There's also a question of timing. New MBA grads often get decent sized paychecks, but they aren't huge (look at averages). If you're trying to buy a house and pay for daycare, things can still be tight repaying $100k+ in loans.

NP, here - I fully funded my MBA (although I did get some grants and scholarships). It's truly not that hard to pay back loans if you are earning a decent salary. Sure we couldn't do everything we wanted right away but that is not exactly suffering. Both my kids graduated from college completely debt free but if they want to get a professional degree they will need to pay for a good chunk of it like I did. I don't think it's reasonable to expect kids to fund undergrad, but totally reasonable to expect them to have skin in the game for grad school.

[Anonymous]

Anonymous wrote:I have 3 kids who are spaced out in age and decent but not unlimited funds. But if one kids opts for W&M and the other for JMU it's not like I feel the JMU student deserves 13k more a year because her school was cheaper. They wanted, needed and valued different things. I think trying to "even things out" between your kids on a dollar level goes down a weird road, but thinking ahead to what you can reasonably manage that seems equitable across children and letting them know that is the plan is the best you can do.

Me too. Since when did we come to "owe" our children equal access to hundreds of thousands of dollars? We try to give them the best shot at a college education we can. But if I send my oldest daughter to college in two years, I'm doing so with the money we've saved up to that point. A lot depends on how the market does, and how much we make. I cannot guarantee my youngest she'll have exactly the same money available to her 8 years later! It's ridiculous.

[Anonymous]

All of you who have hundreds of thousands of dollars saved for each of 3 kids, what is you HHI?! How much are you putting in 529s each month? I am truly amazed.

[Anonymous]

Anonymous wrote:All of you who have hundreds of thousands of dollars saved for each of 3 kids, what is you HHI?! How much are you putting in 529s each month? I am truly amazed.

The annual exclusion for gift tax is was $14,000 last year, and will be $15,000 next year, per person, for a total of $28,000 or $30,000 per couple. Many people put in the maximum (or as close to it as they can) for their kids when they are young. If you start early, you can have 18 years of appreciation on your side, so that helps -- it's not unreasonable to expect an investment to double over 18 years. So put in $30,000 per year for 3 years, and with luck, you could be done.

[Anonymous]

Any advice for someone with a ten year old and no college savings so far? It has not been possible, but our situation and HHI have recently changed for the better, and we need to start saving. Is a 529 the best vehicle at this point? Seems like maybe not...

[Anonymous]

Anonymous wrote:

Anonymous wrote:All of you who have hundreds of thousands of dollars saved for each of 3 kids, what is you HHI?! How much are you putting in 529s each month? I am truly amazed.

The annual exclusion for gift tax is was $14,000 last year, and will be $15,000 next year, per person, for a total of $28,000 or $30,000 per couple. Many people put in the maximum (or as close to it as they can) for their kids when they are young. If you start early, you can have 18 years of appreciation on your side, so that helps -- it's not unreasonable to expect an investment to double over 18 years. So put in $30,000 per year for 3 years, and with luck, you could be done.

whoooooooooosh

[Anonymous]

Anonymous wrote:

Anonymous wrote:All of you who have hundreds of thousands of dollars saved for each of 3 kids, what is you HHI?! How much are you putting in 529s each month? I am truly amazed.

The annual exclusion for gift tax is was $14,000 last year, and will be $15,000 next year, per person, for a total of $28,000 or $30,000 per couple. Many people put in the maximum (or as close to it as they can) for their kids when they are young. If you start early, you can have 18 years of appreciation on your side, so that helps -- it's not unreasonable to expect an investment to double over 18 years. So put in $30,000 per year for 3 years, and with luck, you could be done.

+1.

We've more than doubled the healthy amount we placed in our kids' 529 5-6 years ago.

Thank you, Mr Obama, and thank you, Mr Trump