Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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?

I wish that I could speak to you and to your kids in private.

Without privacy, can you share your kids' anticipated college majors and career plans if known ?

You just know the poster is above board when they are not comfortable making their advice public.

Sleaze meet sleaze.

Anonymous wrote:Why do you have $200K in an emergency fund?

Is that for emergency Porsche replacement?

Anonymous wrote:

Anonymous wrote: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?

I wish that I could speak to you and to your kids in private.

Without privacy, can you share your kids' anticipated college majors and career plans if known ?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We're basically you (also just made it to 300k from 150k just a few years ago, same "big" cash savings). We're anticipating doing in-state (which we can pay easily) for both kids, or elsewhere only if good merit. We're not counting on financial aid.

You take that extra $150 a year and use that for college and don't change your spending. Simple.

You know people pay taxes, right? Lol. But yes, we're able to save more. Still not going to spend all that on private college times two when we can do in state/cheaper and then help our dcs with a downpayment.

Anonymous wrote:

Anonymous wrote:We're basically you (also just made it to 300k from 150k just a few years ago, same "big" cash savings). We're anticipating doing in-state (which we can pay easily) for both kids, or elsewhere only if good merit. We're not counting on financial aid.

You take that extra $150 a year and use that for college and don't change your spending. Simple.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:America likes to punish middle class savers. It’s better to have no savings and get full need based aid.

Stupid statement. Only 5% of assets (savings) are counted towards paying for college.

Ha, ha, ha, ha! Maybe if you are low income. Most private colleges want you to raid your retirement, remortgage your house, take out loans…

+1 That's why they also ask for the market price of your house.

Yes, and whatever the equity of your house--5% is expected to go toward COA.

Is it only 5%? Where does it say that?

That's the fafsa formula. CSS schools calculate however they like. You can reverse engineer somewhat using their own NPC calculators but I've not done it.

Anonymous wrote:You won't get any FA, OP. Colleges are making their business to level the economic playing ground. People who are comfortable but not rich are not permitted to have any luxuries or benefit from their work but are expected to save it all for college tuition. While others go for nearly free, and at our expense. And then WE are told not to whine. LOL.

Anonymous wrote:We're basically you (also just made it to 300k from 150k just a few years ago, same "big" cash savings). We're anticipating doing in-state (which we can pay easily) for both kids, or elsewhere only if good merit. We're not counting on financial aid.

Anonymous wrote:

Anonymous wrote:You’re not going to get FA with an income that high. It doesn’t matter what you do with that money.

+1. The npc you are looking at may be for merit not financial aid.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why do you have $200K in an emergency fund?

Is that for emergency Porsche replacement?

Have you ever calculated the minimum cash you need for a year - mortgage, utilities, food, insurance, cars, etc? It’s a lot more than you might think. Depending on their mortgage, $200k might be ballpark.

Most people can't afford to keep a year's worth of expenses as an emergency fund.

And it's not even recommended to keep 12 months of cash. 3 months top

Anonymous wrote:

Anonymous wrote: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?

I wish that I could speak to you and to your kids in private.

Without privacy, can you share your kids' anticipated college majors and career plans if known ?

Anonymous wrote: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?