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[quote=Anonymous][quote=Anonymous]We currently have $200,000 in cash and stocks, and only $160,000 in two 529s for our kids who are starting college this year and next ($80,000 each.) We originally kept the $200,000 as an emergency fund, but now we realize that amount of cash is really hurting our changes for financial aid. (I know this because I've played around with the net price calculator for the expensive SLAC that my younger kid is interested in.)

I'm trying to figure out how to reduce our cash holdings. My options are:

1-Put all the money into retirement accounts and pay college only out of cashflow, but that puts us in a very tight spot with college payments if our income suddenly drops or if college ends up costing more than anticipated.
2-Put all the money into the 529s, and then use the cashflow we were planning to use for college to boost our retirement savings (so it doesn't end up accumulating as cash.)

I guess my question is, is there a downside to simply dumping $200,000 of cash into the 529 plans in a single year, before the first kid starts college? Will it trigger some kind of tax spike or raise a red flag for the colleges?
[/quote]

Not sure if what you plan is feasible because there will be tax implications for selling stock and you can only superfund the 529 up to $90K in one year. [/quote]

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