Anonymous
05/03/2012 01:06
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:Anonymous wrote:Anonymous wrote:My kids are 3 and 1 and we have $20k and 10k respectively. Not sure how much to contribute each year? Is there a formula based on your percentage HHI?
No, there is a formula based on how much the type of school you want your kid to go to costs, the expected inflation rate in those prices, expected growth rate of 529 plan assets, and time until college. You would deduct from this any amounts you are planning to fund out of cash flow at the time.
The PP who told you to go on-line and find a 529 calculator on-line was right on. Who else does what is completely irrelevant.
Oh yes, it's very easy. Just figure out what college is going to cost in 18 years, figure out what rate that your investments will grow, and work backwards from there. Of course, if we knew what was going to happen in the next 18 years we'd just place a couple of saavy bets and not worry about "saving."
The calculators do it for you. College costs increase faster than the rate of inflation, so you should assume that will continue if the particular calculator asks you to pick an inflation rate. Then when you pick the growth rate for your portfolio, be conservative. Then the calculator will spit out a number. No crystal ball rquired. Just be smart about the assumptions you feed into the calculator.
Anonymous
05/03/2012 00:05
Subject: How much do you put into your kids' 529 (college fund) annually?
If they just make the loans dischargable with bankruptcy they would deflate the bubble.
Anonymous
05/03/2012 00:01
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:We put in $150/month for each child (2). My parents just added 10K to each - one time only. Our favorite joke is "whichever kid is the most motivated gets college, everyone else fends for themselves."In truth, we have 5 rental properties which will be paid off just around the time our first hits his sophomore or junior year. So we will be able to cash-flow at that point, and will use whatever we've saved to get him through his first year or two.
I will NEVER pay for a private college degree for either of them. A good state school is more than enough for every kid to enjoy smoking pot and occasionally attending class. I also have no intention of sending them the first year after high school - if they want the cash, they're going to have to spend a few years growing up somewhere in some kind of service program or military service. Then we will gladly send them to somewhere like Indiana University (my school) or Maryland or somewhere decent, all expenses paid. I will NEVER saddle them with the yoke of student loans. My little cousin just finished pursuing a standard degree at Bates college and now has $150,000 in student loans with a $35,000 salary. It's an abomination.
Getting off soapbox.
Not completely sure where I stand on these issues yet. Was raised that parents should pay for whatever school the kid can get into. But your example is chilling. $150k for a good but not great school and no prospects of a salary large enough to pay it off. It is an abomination.
Anonymous
05/02/2012 23:47
Subject: How much do you put into your kids' 529 (college fund) annually?
We put in $150/month for each child (2). My parents just added 10K to each - one time only. Our favorite joke is "whichever kid is the most motivated gets college, everyone else fends for themselves." In truth, we have 5 rental properties which will be paid off just around the time our first hits his sophomore or junior year. So we will be able to cash-flow at that point, and will use whatever we've saved to get him through his first year or two.
I will NEVER pay for a private college degree for either of them. A good state school is more than enough for every kid to enjoy smoking pot and occasionally attending class. I also have no intention of sending them the first year after high school - if they want the cash, they're going to have to spend a few years growing up somewhere in some kind of service program or military service. Then we will gladly send them to somewhere like Indiana University (my school) or Maryland or somewhere decent, all expenses paid. I will NEVER saddle them with the yoke of student loans. My little cousin just finished pursuing a standard degree at Bates college and now has $150,000 in student loans with a $35,000 salary. It's an abomination.
Getting off soapbox.
In truth, we have 5 rental properties which will be paid off just around the time our first hits his sophomore or junior year. So we will be able to cash-flow at that point, and will use whatever we've saved to get him through his first year or two.
I will NEVER pay for a private college degree for either of them. A good state school is more than enough for every kid to enjoy smoking pot and occasionally attending class. I also have no intention of sending them the first year after high school - if they want the cash, they're going to have to spend a few years growing up somewhere in some kind of service program or military service. Then we will gladly send them to somewhere like Indiana University (my school) or Maryland or somewhere decent, all expenses paid. I will NEVER saddle them with the yoke of student loans. My little cousin just finished pursuing a standard degree at Bates college and now has $150,000 in student loans with a $35,000 salary. It's an abomination.
Getting off soapbox.
Anonymous
05/02/2012 23:36
Subject: How much do you put into your kids' 529 (college fund) annually?
5k a year and we will pay our house off by the time our son is in uni.
Anonymous
05/02/2012 23:20
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:Anonymous wrote:My kids are 3 and 1 and we have $20k and 10k respectively. Not sure how much to contribute each year? Is there a formula based on your percentage HHI?
No, there is a formula based on how much the type of school you want your kid to go to costs, the expected inflation rate in those prices, expected growth rate of 529 plan assets, and time until college. You would deduct from this any amounts you are planning to fund out of cash flow at the time.
The PP who told you to go on-line and find a 529 calculator on-line was right on. Who else does what is completely irrelevant.
Oh yes, it's very easy. Just figure out what college is going to cost in 18 years, figure out what rate that your investments will grow, and work backwards from there. Of course, if we knew what was going to happen in the next 18 years we'd just place a couple of saavy bets and not worry about "saving."
Anonymous
05/02/2012 23:12
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:nothing and will put nothing. college bubble will burst by the time they are in college.
So it will be free and you won't have to pay anything?
that's right. i got 2 ivy league degrees for free so she can do it, too. i am certainly not going to pay $200,000k in today's dollars for some worthless never-heard-of-it degree.
Me too pp.
Freeloading off others
it works in both directions. smart people bring intellectual status to great schools in which more affluent but mediocre people share, so yes, they get something in return.
Anonymous
05/02/2012 22:59
Subject: Re:How much do you put into your kids' 529 (college fund) annually?
"Nothing. We are fully funding our retirement account (1500 a month, HHI of 160,000) and there is nothing left over for college."
Actually everything in the pop-finance literature that I've been reading for the last 3-5 years have said that this is actually smarter in the sense that it will be less of a financial strain on your children- basically college loans are less burdensome than the costs associated with supporting a retired or elderly parent- particularly with people having fewer children and having them much older, we have a population of 30 somethings with aging parents and the costs of their own younger families (generations prior didn't have parents in their 70s until they were near or in their 50s, having already raised their children)
Obviously if you can do both, that is ideal, but choosing retirement over college is (supposedly) actually better for your children financially. Again, I am getting this all from boiled down, major news sources like CNBC, CNNMoney, and not financial journals (its not my field)- but its a trend I keep seeing in articles.
Actually everything in the pop-finance literature that I've been reading for the last 3-5 years have said that this is actually smarter in the sense that it will be less of a financial strain on your children- basically college loans are less burdensome than the costs associated with supporting a retired or elderly parent- particularly with people having fewer children and having them much older, we have a population of 30 somethings with aging parents and the costs of their own younger families (generations prior didn't have parents in their 70s until they were near or in their 50s, having already raised their children)
Obviously if you can do both, that is ideal, but choosing retirement over college is (supposedly) actually better for your children financially. Again, I am getting this all from boiled down, major news sources like CNBC, CNNMoney, and not financial journals (its not my field)- but its a trend I keep seeing in articles.
Anonymous
05/02/2012 22:07
Subject: How much do you put into your kids' 529 (college fund) annually?
$600/ month for 2yo. HHI is 125k. We have had an income cut recently so will have to lower the amount soon.
Anonymous
05/02/2012 22:04
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:nothing and will put nothing. college bubble will burst by the time they are in college.
So it will be free and you won't have to pay anything?
that's right. i got 2 ivy league degrees for free so she can do it, too. i am certainly not going to pay $200,000k in today's dollars for some worthless never-heard-of-it degree.
Me too pp.
Freeloading off others
Anonymous
05/02/2012 21:46
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:Anonymous wrote:Anonymous wrote:nothing and will put nothing. college bubble will burst by the time they are in college.
So it will be free and you won't have to pay anything?
that's right. i got 2 ivy league degrees for free so she can do it, too. i am certainly not going to pay $200,000k in today's dollars for some worthless never-heard-of-it degree.
Me too pp.
Anonymous
05/02/2012 21:44
Subject: How much do you put into your kids' 529 (college fund) annually?
$2000/year. And it's a STRUGGLE since we're payck to payck.
Household income $85,000
Household income $85,000
Anonymous
05/02/2012 21:38
Subject: Re:How much do you put into your kids' 529 (college fund) annually?
Nothing. We are fully funding our retirement account (1500 a month, HHI of 160,000) and there is nothing left over for college.
Anonymous
05/02/2012 21:22
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:My kids are 3 and 1 and we have $20k and 10k respectively. Not sure how much to contribute each year? Is there a formula based on your percentage HHI?
No, there is a formula based on how much the type of school you want your kid to go to costs, the expected inflation rate in those prices, expected growth rate of 529 plan assets, and time until college. You would deduct from this any amounts you are planning to fund out of cash flow at the time.
The PP who told you to go on-line and find a 529 calculator on-line was right on. Who else does what is completely irrelevant.
Anonymous
05/02/2012 21:01
Subject: How much do you put into your kids' 529 (college fund) annually?
Anonymous wrote:nothing and will put nothing. college bubble will burst by the time they are in college.
Ditto.
But my parents insist on contributing so they have a fund for each kid. I have nothing to do with it though. They can waste their money if they want.