Hi there! Do you have a financial advisor? It would be better to consult the one prior to investing. I cooperate with the guys from linkagemind company in financial and investing sphere. They seem to know all the answers.

We are in a similar situation and have been trying to think it through based on the following considerations:

- the hurdle rate for the 529 or other investments vs. the mortgage interest rate, factoring in effects of inflation and inflation expectations.

- job security

- long-term return on equities or bonds, as well as expectations of returns for a portfolio adjusted for inflation, with expectations of returns considering macroeconomic conditions related to secular stagnation, which may persist for another decade or more if Japan is any guide, absent a massive shock such as a crash or a major war.

- whether we can trust that our 6 year old will go to college.

- expectations of increases in costs of attendance and potential for government intervention in the next 12 years to increase affordability.

- desirability of alternative options to high cost US colleges, e.g. Canada, UK, Australia.

It's a tough call and for us it turns on our personal pessimism about the future. We decided to pay off our mortgage before our child graduates high school and try to pay as much as we can for college through our wages and any additional savings we can accrue.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:another vote for do neither. Investing too much in a 529 makes me nervous -- what if your kid gets a scholarship somewhere? You can always get a home equity loan to help pay for college. I'd probably invest the money in a vanguard fund or increase my retirement savings.

+1 I wouldn't put all of college savings in a 529

Curious what is the max ppl are putting in 529s before switching to other investment vehicles?

I'm not near the maxing point - but planning to stop at 200K a for one child. Too much, too little? I just didn't want DC to be limited to public colleges. Already maxing out iras, not much left for other vehicles until my "max" is reached.

Do not pay off your mortgage. When your child will be applying for financial aid or scholarship, payed off house viewed as an asset, mortgage viewed as a debt.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:another vote for do neither. Investing too much in a 529 makes me nervous -- what if your kid gets a scholarship somewhere? You can always get a home equity loan to help pay for college. I'd probably invest the money in a vanguard fund or increase my retirement savings.

+1 I wouldn't put all of college savings in a 529

Curious what is the max ppl are putting in 529s before switching to other investment vehicles?

We are maxing the state tax benefit (MD) and anything after that is invested.

New poster -- invested where, in what vehicle? A Roth? Or a straight up investment account?

Straight up investment accounts at medium risk. We also put the max in our retirement. We aren't using Roth.

Anonymous wrote:

Anonymous wrote:OP, what college calculator are you using? I've looked into this and also have two kids, one in 4th grade and one in 6th grade. I decided that $1000/month was plenty and it would cover more than 60%. I don't understand what assumptions you are using to get to your numbers but you must be assuming private college no financial aid.

I should clarify that I mean $1000 per month per kid.

If you are putting $1000 per month per child for college, and have a 15 year mortgage, I think you will be ok.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:another vote for do neither. Investing too much in a 529 makes me nervous -- what if your kid gets a scholarship somewhere? You can always get a home equity loan to help pay for college. I'd probably invest the money in a vanguard fund or increase my retirement savings.

+1 I wouldn't put all of college savings in a 529

Curious what is the max ppl are putting in 529s before switching to other investment vehicles?

We are maxing the state tax benefit (MD) and anything after that is invested.

New poster -- invested where, in what vehicle? A Roth? Or a straight up investment account?

Again, OP, what calculator are you using?

I think calculator assumed 5% annual increase in cost. Not sure what assumed growth was.

Anonymous wrote:

Anonymous wrote:I think you have entered the numbers incorrectly or made some strange assumptions. $1k per child should be more than enough for 60 percent at even the average private college.

We are investing that much now but kids are 9 and 11 and we have less than 40k saved each. Calculator says that we will have 139k each and a private will be over 80 by the time they go.

What are you assuming for growth rate of college costs vs returns?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:another vote for do neither. Investing too much in a 529 makes me nervous -- what if your kid gets a scholarship somewhere? You can always get a home equity loan to help pay for college. I'd probably invest the money in a vanguard fund or increase my retirement savings.

+1 I wouldn't put all of college savings in a 529

Curious what is the max ppl are putting in 529s before switching to other investment vehicles?

We are maxing the state tax benefit (MD) and anything after that is invested.

Anonymous wrote:I think you have entered the numbers incorrectly or made some strange assumptions. $1k per child should be more than enough for 60 percent at even the average private college.

We are investing that much now but kids are 9 and 11 and we have less than 40k saved each. Calculator says that we will have 139k each and a private will be over 80 by the time they go.

I think you have entered the numbers incorrectly or made some strange assumptions. $1k per child should be more than enough for 60 percent at even the average private college.

Anonymous wrote:another vote for do neither. Investing too much in a 529 makes me nervous -- what if your kid gets a scholarship somewhere? You can always get a home equity loan to help pay for college. I'd probably invest the money in a vanguard fund or increase my retirement savings.

I think there are some ways to make withdrawals without the penalty if there's a scholarship.