There is no such thing as a fully-funded 529 until you pay for that last year of college. Sorry. The closer you are to high school graduation, the less uncertainty there is, but you don't know which school your child will choose. Fine, we will aim for the most expensive school times 4. Ok. So we know how much that costs now, but a) what will it cost when our kid gets there, and b) what will be our rate of return until then.

The least uncertain option would be to fund 4 years of the most expensive option TODAY and hope that your rate of return exceeds the increasing cost of college. This is a decent bet, but not a sure thing.

You don't get the deduction in VA for extra deposits, but you can roll any excess forward to future years. Fully funded prepaid plans are easy to determine. Otherwise, we are seeking current dollars for 4 years at a good school which means about $175000 per child. We also have Independent 529, which will compute how many years you have prepaid for a particular school. We have fully paid VA prepaid, 1 year of Independent 529 funded, and about $25K more for each DC, ages 14 and 12. Did a computation and determined we need to up contributions to $2K per kid, per month to get where we want to be - so doing that now.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see people throwing around that their child has a "fully funded 529". I don't think there is any consensus about what this actually means. I can see it meaning a few different things:
1) You contribute an amount each year to get maximum tax write off (In VA this is $4,000 per child per year)
2) The 529 currently has an amount in it that given a historical rate of return and years until college, will pay for 4 years of college at a state school
3) #2, but at a private college
4) #2 or # 3, but includes funds for grad school as well
5) It has the maximum allowed contribution $350,000.

Technically, it's $4,000 per account per year. So, you could have multiple accounts for the same beneficiary and take multiple $4,000 deductions ... up to the $14,000 gift limit.

OP here - have never heard this before. Can you provide a link? So, can DH open accounts for our children and we can claim $8K per child per year?

NP here. It's definitely NOT the case in DC. In DC it is $4k max per person.

Um, so what does it mean on the DC 529 website when it reads:

Deduct up to $4,000 in Plan contributions from their federal adjusted gross income each year on their D.C. tax return (up to $8,000 for married couples filing jointly if both own accounts).


http://www.dccollegesavings.com/about-tax-benefits.aspx

Anonymous wrote:I guess I would say paying for 4 years of private is fully funded. I have no interest in tying up that kind of money in a 529 given we have only one child so if she were to decide on a different path, we wouldn't have anyone else to name as beneficiary.

So we are being cautious and only saving the max in one account in VA of $4,000 a year. We're "saving" the rest in other vehicles that won't limit us to paying for college.

I can see where this would be a valid definition. Personally I consider covering tuition, room & board, and books/fees for a state flagship to be fully funded, since it allows DC to make it through college with no loans. That's what we have saved in a 529 for our 7-year old (we got lucky with lump-sum investing near the bottom of the market in 2008) so we don't intend to fund it any further. If DC wants to go the private route and we can make up the difference at that point, we will.

Well, the student will have to qualify for financial aid based on the parents' income. if I knew that my income was such that it was not going up and my child would qualify for financial aid I might take this route, especially because the wiser thing to do with my money would be to save it for retirement so I am not a burden on my child later in life.

I know that we do not make enough money to pay for college out of pocket (like my parents could when I went to the University of CA in the 80s and fees were less than $1000/year). We do, however, make too much money to qualify for financial aide. So, we save in a 529 and plan to pay for college. I want to leave the option open to have my children go to the best school they can get into, public or private.

I would not say that college is fully funded, but we likely will be able to pay living expenses as we go and use the savings to pay tuition.

Anonymous wrote:I came to this b/c of a private school thread with an OP who is getting 65% FA for K (and plans to continue that child through 12) and then expect hefty FA in college. That's it, that's her financial plan! I was shocked! We save like crazy with the notion that college costs continue to go up. We save a lot and never feel like we're doing enough! That said, our kids are probably set for 2 years private college and they are in ES now, so rationally I know we're doing a lot.

Are there really people out there who's "plan" for college is to spend everything on tuition now and hope for FA in college?!? Seems so reckless.

What private schools do with their own money isn't really any of your business, is it?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see people throwing around that their child has a "fully funded 529". I don't think there is any consensus about what this actually means. I can see it meaning a few different things:
1) You contribute an amount each year to get maximum tax write off (In VA this is $4,000 per child per year)
2) The 529 currently has an amount in it that given a historical rate of return and years until college, will pay for 4 years of college at a state school
3) #2, but at a private college
4) #2 or # 3, but includes funds for grad school as well
5) It has the maximum allowed contribution $350,000.

Technically, it's $4,000 per account per year. So, you could have multiple accounts for the same beneficiary and take multiple $4,000 deductions ... up to the $14,000 gift limit.

OP here - have never heard this before. Can you provide a link? So, can DH open accounts for our children and we can claim $8K per child per year?

NP here. It's definitely NOT the case in DC. In DC it is $4k max per person.

I came to this b/c of a private school thread with an OP who is getting 65% FA for K (and plans to continue that child through 12) and then expect hefty FA in college. That's it, that's her financial plan! I was shocked! We save like crazy with the notion that college costs continue to go up. We save a lot and never feel like we're doing enough! That said, our kids are probably set for 2 years private college and they are in ES now, so rationally I know we're doing a lot.

Are there really people out there who's "plan" for college is to spend everything on tuition now and hope for FA in college?!? Seems so reckless.

Anonymous wrote:

Anonymous wrote:this precise question with almost exactly these options was posted recently. worth doing a search if you are really interested in the answers.

I'm not OP, but it really irritates me when people say this. If forum posters were only ever allowed to ask original questions, forum activity would seriously die a quick death. Furthermore, have you ever tried searching these forums? I sometimes can't even find my own post using words I'm sure I used in my post.

OP, for me I think it would be 2, but honestly we'll probably never get there, because our retirement needs work first. I might modify it slightly to be that by graduation age, it will pay for school, based on our contributions in the future, not that it currently does.

It's a shame for you that you feel irritated, because people like PP and me will continue to say it, and I actually think it is good advice. On MANY occasions I have taken the time to write a thoughtful response to something, and many other people have as well, and it's been a good, informative thread. When someone posts the exact same question a day later, I'm not going to take the time to rewrite the whole thing I wrote before. I'm just not. And I would guess a lot of other people feel the same way. So yeah, I do think you are going to get the most complete information by doing a brief search of the archives before posting, particularly if, as a PP pointed out, it's a question seeking specific information rather than conversation. I'm sure some new people might see the second posting, but I suspect a lot of us read these boards pretty thoroughly (as evidenced by the fact that people notice it's a repeat posting.)

You can feel as irritated as you'd like -- if I cared enough to have a feeling about this, I would find it irritating that you expect lots of other people to take their time to rewrite you a response just because you can't be bothered to do a 2-minute search.

I think fully funded means "whatever I need to pay for my child's college education," which will differ depending on one's income (and expected family contribution) and one's definition of "college" (community college vs. 4 year vs 4 year + grad school; live at home and commute vs. live on campus; in-state public vs. pricey private).

Someone who plans to pay for 4 years at Williams plus med school is going to describe "fully funded" very differently from someone who plans to have their child live at home in Fairfax and commute to GMU.

I guess I would say paying for 4 years of private is fully funded. I have no interest in tying up that kind of money in a 529 given we have only one child so if she were to decide on a different path, we wouldn't have anyone else to name as beneficiary.

So we are being cautious and only saving the max in one account in VA of $4,000 a year. We're "saving" the rest in other vehicles that won't limit us to paying for college.

In my view, being able to pay for 4 years of private would be "fully funded." I'm on track to be able to pay for 4 years of public (save about 3 years worth and pay for the rest in real time), which is the best I can do.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see people throwing around that their child has a "fully funded 529". I don't think there is any consensus about what this actually means. I can see it meaning a few different things:
1) You contribute an amount each year to get maximum tax write off (In VA this is $4,000 per child per year)
2) The 529 currently has an amount in it that given a historical rate of return and years until college, will pay for 4 years of college at a state school
3) #2, but at a private college
4) #2 or # 3, but includes funds for grad school as well
5) It has the maximum allowed contribution $350,000.

Technically, it's $4,000 per account per year. So, you could have multiple accounts for the same beneficiary and take multiple $4,000 deductions ... up to the $14,000 gift limit.

OP here - have never heard this before. Can you provide a link? So, can DH open accounts for our children and we can claim $8K per child per year?

http://www.bogleheads.org/forum/viewtopic.php?f=2&t=87220

Awesome! Thanks PP!

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see people throwing around that their child has a "fully funded 529". I don't think there is any consensus about what this actually means. I can see it meaning a few different things:
1) You contribute an amount each year to get maximum tax write off (In VA this is $4,000 per child per year)
2) The 529 currently has an amount in it that given a historical rate of return and years until college, will pay for 4 years of college at a state school
3) #2, but at a private college
4) #2 or # 3, but includes funds for grad school as well
5) It has the maximum allowed contribution $350,000.

Technically, it's $4,000 per account per year. So, you could have multiple accounts for the same beneficiary and take multiple $4,000 deductions ... up to the $14,000 gift limit.

OP here - have never heard this before. Can you provide a link? So, can DH open accounts for our children and we can claim $8K per child per year?

http://www.bogleheads.org/forum/viewtopic.php?f=2&t=87220

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see people throwing around that their child has a "fully funded 529". I don't think there is any consensus about what this actually means. I can see it meaning a few different things:
1) You contribute an amount each year to get maximum tax write off (In VA this is $4,000 per child per year)
2) The 529 currently has an amount in it that given a historical rate of return and years until college, will pay for 4 years of college at a state school
3) #2, but at a private college
4) #2 or # 3, but includes funds for grad school as well
5) It has the maximum allowed contribution $350,000.

Technically, it's $4,000 per account per year. So, you could have multiple accounts for the same beneficiary and take multiple $4,000 deductions ... up to the $14,000 gift limit.

OP here - have never heard this before. Can you provide a link? So, can DH open accounts for our children and we can claim $8K per child per year?

My SIL and BIL do this...in MD though.

We do this, too, also in Maryland, on the advice of our financial advisors. We are two parents with two kids. So Parent A has an account for Kid 1 and Kid 2, and Parent B has an account for Kid 1 and Kid 2.