What’s “your number” for each kid’s 529?

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pepperz
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What’s “your number” for each kid’s 529?

Post by pepperz »

Do you have a goal amount for kids 529 that you’re proactively working towards?

My kids are 3 and 1.5 years old and trying to work out my philosophy here.
coalcracker
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Re: What’s “your number” for each kid’s 529?

Post by coalcracker »

My goal is $400k per child (currently 6 and 3), with about half that front loaded into 529’s and the other half in earmarked taxable accounts. The idea is to hedge my bets in case college is not in the cards.
Last edited by coalcracker on Wed Oct 28, 2020 9:13 am, edited 1 time in total.
runner3081
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Re: What’s “your number” for each kid’s 529?

Post by runner3081 »

Age 8, no number in mind. Putting $375 per month + some gifts from grandparents.

To be honest, we are focusing more on our retirement savings than college savings.

Will pay tuition and books for all 4- years. If she stays local, she will have a free education (we have a number of community colleges within 10 miles and a major state university 15 miles away). If she goes elsewhere, room and board is on her.

At the point this comes, we will just cash flow the expenses for tuition and books for anything over the 529 balance.
Last edited by runner3081 on Wed Oct 28, 2020 9:14 am, edited 1 time in total.
bampf
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Re: What’s “your number” for each kid’s 529?

Post by bampf »

I figure about 75% of an in state top tier public university education is more than enough. In fact, it has been too much so far.
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simplesimon
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Re: What’s “your number” for each kid’s 529?

Post by simplesimon »

I'm thinking about $150k as the ending value so I'm only contributing ~$5k/year and hope to cash flow the rest or use assets outside of the 529. I don't want too much tied up in the 529 to hedge the risk that education changes in 20 years.
Olemiss540
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Re: What’s “your number” for each kid’s 529?

Post by Olemiss540 »

I am focused on saving for retirement so that I can cash flow college as much as possible. Without them in the house we should be in a good position to button down expenses and get them (twins) through State U with minimal debt hopefully. If I am off target once the day comes, will help them with their debt payoff for 3 or 4 years after school ends.

I am more worried about hoarding cash/investments for job security and retirement reasons than burying acorns in a 529 but hopefully a few more raises and that will change before they hit highschool!
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
arsenalfan
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Re: What’s “your number” for each kid’s 529?

Post by arsenalfan »

When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
6bquick
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Re: What’s “your number” for each kid’s 529?

Post by 6bquick »

may be a travesty among Bogleheads, but we're putting $50/mo in each kid's 529 (4 and 2yo), plus any money they get from relatives, and then my daughter helps me roll coins twice a year or so from the spare change jar which goes into their 529's. that's it. I don't expect six figures in either account ever.
if we have means to augment that when the time comes, we will. if we don't, we won't.
ThankYouJack
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Re: What’s “your number” for each kid’s 529?

Post by ThankYouJack »

pepperz wrote: Wed Oct 28, 2020 9:09 am Do you have a goal amount for kids 529 that you’re proactively working towards?

My kids are 3 and 1.5 years old and trying to work out my philosophy here.
Depends heavily on your personal situation. I personally don't save in a 529 because I don't like the strings but would if I got a state tax break.

So for me, it's $0. I'm just planning to cash flow or use $ from my taxable account.

For Jack Bogle himself, he didn't use 529s either:

https://www.reuters.com/article/us-colu ... LI20120911
Q: Do you set a little aside for those grandkids in 529 college-savings plans? (Vanguard has about $40 billion in assets in 27 state 529 plans.)

A: I don’t really like the idea of tying up your money in 529 plans, because of all the restrictions on withdrawals. I’m not against them, I just like having more flexibility than being required to use those funds specifically for educational purposes. We do save a little money for all my grandkids every year, but we just chose the Vanguard Balanced Index Fund (VBINX). It’s about 60 percent stocks, 40 percent bonds, and it’s been wonderful. We give them what we can within annual gift-tax limitations, and put it all into that very tax-efficient fund.
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teen persuasion
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Re: What’s “your number” for each kid’s 529?

Post by teen persuasion »

Zero. 529 accounts are counterproductive for us.
Njm8845
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Re: What’s “your number” for each kid’s 529?

Post by Njm8845 »

arsenalfan wrote: Wed Oct 28, 2020 9:23 am When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Just curious, how do you plan on using all of the $300k?

Even at an elite private at 60k/yr, looks like you’ll have a decent amount left over.
KlangFool
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Re: What’s “your number” for each kid’s 529?

Post by KlangFool »

OP,

Zero.


I paid for my kids' college education through my annual savings.


KlangFool
gonefishing01
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Re: What’s “your number” for each kid’s 529?

Post by gonefishing01 »

100k per kid is my target, which i don’t expect to cover everything if all three go four years. And if they decide to go out of state or somewhere more expensive then I’m prepared to cash flow the rest with taxable. I just can’t commit to more than that in something as limiting as a 529 as my state has no tax incentives for contributions. Kids will be taken care of either way and if they skip or don’t finish college like I did then ~300k tied up in these things is no big concern.
smitcat
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Re: What’s “your number” for each kid’s 529?

Post by smitcat »

KlangFool wrote: Wed Oct 28, 2020 9:40 am OP,

Zero.


I paid for my kids' college education through my annual savings.


KlangFool
+1 for us.
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Peter Foley
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Re: What’s “your number” for each kid’s 529?

Post by Peter Foley »

We use 529 plans for our grandchildren. Our aim is 50% of cost at a state university. We have also funded small custodial account to cover incidentals not covered by 529 plans.
Last edited by Peter Foley on Wed Oct 28, 2020 10:02 am, edited 1 time in total.
ccf
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Re: What’s “your number” for each kid’s 529?

Post by ccf »

Wow there are some huge numbers in this thread!

I plan to stop contributing when I have 100% in state tuition, room and board in today's (well, whatever day i stop) dollars for each child. Currently that's ~$100K per child.
arsenalfan
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Re: What’s “your number” for each kid’s 529?

Post by arsenalfan »

Njm8845 wrote: Wed Oct 28, 2020 9:40 am
arsenalfan wrote: Wed Oct 28, 2020 9:23 am When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Just curious, how do you plan on using all of the $300k?

Even at an elite private at 60k/yr, looks like you’ll have a decent amount left over.
Have a nephew at an elite - first year was $75k all-in.
Also, grad school.
Leftovers for both, probably let compound and then rename to grandkids.

Like all "your number" questions, pretty personal and YMMV.
Last edited by arsenalfan on Wed Oct 28, 2020 10:02 am, edited 1 time in total.
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anon_investor
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Re: What’s “your number” for each kid’s 529?

Post by anon_investor »

I have 3 kids. I contribute to the state income tax deduction max, and divide it among their accounts, with the older kid getting a little more. I see less value in 529 plan contributions that do not receive an state income tax deduction. I will probably cash flow any shortfall or draw from my taxable account.

To add, I am already maxing out all tax advantaged accounts (backdoor Roth IRAs, 401k including mega backdoor roth, HSA) and contributing a healthy amount to taxable account.
stoptothink
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Re: What’s “your number” for each kid’s 529?

Post by stoptothink »

Current tuition + fees for local U is ~$27k...for 4yrs. Wife is an alum and it is ~5 miles from our home; we aren't going anywhere and if they don't want to live at home they can figure out how to pay for "room & board". We earmarked $25k each for both our kids (currently 8 and 5). We are done after our (state deduction max) contributions on 1/1/21. We'll let the market do its thing and if it isn't enough or they end up going somewhere more costly, we'll (them and us together) figure it out.
markcoop
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Re: What’s “your number” for each kid’s 529?

Post by markcoop »

I saved about $360K for my 3 kids , or $120K/kid. My first kid went to two different schools (1 year at $45K and 3 years at $25K) and my second kid averaged a little over $30K/yr. So, so far I am exactly on target. My older kid understood that the more expensive school meant she would chip in via student loans. Maybe that was part of the reason for the switch.
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illumination
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Re: What’s “your number” for each kid’s 529?

Post by illumination »

$200k per kid would probably be my number. I'd rather be short than over, and I feel that's enough of a start where any potential shortfall can be figured out either by the student with a loan or by me.

And these numbers are getting absurd, my state university tuition when I went (using CPI to adjust for inflation in today's dollars) would be $3,500 a year. The actual tuition now is around $30,000 per year. This is one of those "fleecings" the public has just accepted.
fullplay2024
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Re: What’s “your number” for each kid’s 529?

Post by fullplay2024 »

$250K per child in 529 + UTMA accounts.
They're 18 and 14 now. Child #1 is consuming full amount as an out-of-state student at UMich.
Last edited by fullplay2024 on Wed Oct 28, 2020 10:32 am, edited 1 time in total.
Mr.Chlorine
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Re: What’s “your number” for each kid’s 529?

Post by Mr.Chlorine »

Mid 20s with no kids, but goal for (hopefully) future kids is $100k each.

I went to an average state school and my all-in cost for 4 years was $65k-70k. Around 1/3 covered from scholarships, 1/3 university jobs, final 1/3 paid by family. I got lucky with a few generous scholarships, but I expect even mid level students to get 15% of their costs covered by random scholarships. On top of that, university jobs are wildly under appreciated. The two years I worked for them, my room and board were covered plus a little spending cash. The goal of $100k per kid will hopefully cover 50% of their costs.
vasaver
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Re: What’s “your number” for each kid’s 529?

Post by vasaver »

KlangFool wrote: Wed Oct 28, 2020 9:40 am OP,
Zero.
I paid for my kids' college education through my annual savings.
KlangFool
arsenalfan wrote: ↑Wed Oct 28, 2020 9:23 am
When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Arsenalfan - Those are great numbers - especially with all that taxfree growth. Klangool - why didn't you do something like this?
gowest
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Re: What’s “your number” for each kid’s 529?

Post by gowest »

There are lots of considerations and no "one size fits all," but to help with your data points:

We contributed $95k to each kid's account, and the balances are now around $115k each. (They're currently ages 11 and 13.) We don't intend to add any more. We will cash flow any difference. We didn't want too much money subject to the requirements of a 529. We figured that these amounts we've contributed to the 529 plans would be enough (or at least a decent start) to pay for any of my state's many very good four-year universities.
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Vulcan
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Re: What’s “your number” for each kid’s 529?

Post by Vulcan »

pepperz wrote: Wed Oct 28, 2020 9:09 am Do you have a goal amount for kids 529 that you’re proactively working towards?

My kids are 3 and 1.5 years old and trying to work out my philosophy here.
It can be very difficult to predict how much money you may need.

In our case both our kids had high chances of securing full tuition plus scholarships to our state flagship (which they both eventually did, one as early as 7th grade), so depending on how the admissions game played out our cost could be close to zero or they could be close to but perhaps not quite full pay if they got into a top private (we are a doughnut hole family making just under $200K/yr).

Coupled with the fact that by the time one accumulates enough in 529s for earnings to be a significant driver it is time to switch to conservative investments (your real aggressive investment horizon in a 529 is maybe 10 years or so), it lead us to stop contributing to 529s we set up when kids were born pretty early on and focus instead on maxing out retirement accounts and paying off the house, in order to, among other reasons, to maximize possible future need-based financial aid should the admissions gods smile on us.

Now that our elder has ended up at his dream school, we are saving $5K/yr for every 100K we put into retirement account instead of 529s, because 529s would count against us in the finaid calculations. Assuming no changes in income we should be able to by and large cash flow his college by reducing our savings rate, and if we suffer a reduction in income, our finaid will go up.

OP, are you maxing out your retirement accounts? Is your household income above $200K/yr making finaid considerations less relevant?
Last edited by Vulcan on Wed Oct 28, 2020 12:18 pm, edited 1 time in total.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
KlangFool
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Re: What’s “your number” for each kid’s 529?

Post by KlangFool »

vasaver wrote: Wed Oct 28, 2020 10:35 am
KlangFool wrote: Wed Oct 28, 2020 9:40 am OP,
Zero.
I paid for my kids' college education through my annual savings.
KlangFool
arsenalfan wrote: ↑Wed Oct 28, 2020 9:23 am
When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Arsenalfan - Those are great numbers - especially with all that taxfree growth. Klangool - why didn't you do something like this?
vasaver,

<<Klangool - why didn't you do something like this?>>

1) I am not that rich. My portfolio is only 1.5 million. I would not spend 570K on college educations.

2) 529 provides little to no tax benefits to me.

3) My annual saving is 50K to 60K per year. It is good enough to pay for a college education. There is no reason for me to save for a college education.

4) I only paid 30K per kid per year = total 240K.


KlangFool
Last edited by KlangFool on Wed Oct 28, 2020 11:00 am, edited 1 time in total.
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anon_investor
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Re: What’s “your number” for each kid’s 529?

Post by anon_investor »

KlangFool wrote: Wed Oct 28, 2020 10:57 am
vasaver wrote: Wed Oct 28, 2020 10:35 am
KlangFool wrote: Wed Oct 28, 2020 9:40 am OP,
Zero.
I paid for my kids' college education through my annual savings.
KlangFool
arsenalfan wrote: ↑Wed Oct 28, 2020 9:23 am
When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Arsenalfan - Those are great numbers - especially with all that taxfree growth. Klangool - why didn't you do something like this?
vasaver,

<<Klangool - why didn't you do something like this?>>

I am not that rich. 529 provide little to no tax benefits to me.


KlangFool
I also think KlangFool's state does not offer a state income tax deduction, which makes it even worse.
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Vulcan
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Re: What’s “your number” for each kid’s 529?

Post by Vulcan »

anon_investor wrote: Wed Oct 28, 2020 10:58 am I also think KlangFool's state does not offer a state income tax deduction, which makes it even worse.
Same here.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
vasaver
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Re: What’s “your number” for each kid’s 529?

Post by vasaver »

KlangFool wrote: Wed Oct 28, 2020 10:57 am
vasaver wrote: Wed Oct 28, 2020 10:35 am
KlangFool wrote: Wed Oct 28, 2020 9:40 am OP,
Zero.
I paid for my kids' college education through my annual savings.
KlangFool
arsenalfan wrote: ↑Wed Oct 28, 2020 9:23 am
When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Arsenalfan - Those are great numbers - especially with all that taxfree growth. Klangool - why didn't you do something like this?
vasaver,

<<Klangool - why didn't you do something like this?>>

I am not that rich. 529 provide little to no tax benefits to me.


KlangFool
1k a month...even $500 or $250 and skipping a few years could work out nicely. Would you have received a state tax benefit to sweeten the pot?
vasaver
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Re: What’s “your number” for each kid’s 529?

Post by vasaver »

Vulcan wrote: Wed Oct 28, 2020 10:58 am
anon_investor wrote: Wed Oct 28, 2020 10:58 am I also think KlangFool's state does not offer a state income tax deduction, which makes it even worse.
Same here.
I thought he was in Virginia?
bloom2708
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Re: What’s “your number” for each kid’s 529?

Post by bloom2708 »

$50k 529 (small state tax benefit)
$50k taxable

For each kid (3 kids, 1 currently in college, another next fall).

So far so good.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
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anon_investor
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Re: What’s “your number” for each kid’s 529?

Post by anon_investor »

bloom2708 wrote: Wed Oct 28, 2020 11:03 am $50k 529 (small state tax benefit)
$50k taxable

For each kid (3 kids, 1 currently in college, another next fall).

So far so good.
How much did you put in each year to the 529 plan?
Soon2BXProgrammer
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Re: What’s “your number” for each kid’s 529?

Post by Soon2BXProgrammer »

pepperz wrote: Wed Oct 28, 2020 9:09 am Do you have a goal amount for kids 529 that you’re proactively working towards?

My kids are 3 and 1.5 years old and trying to work out my philosophy here.
75% of in state total costs... well funded but allows flexibility.
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SmileyFace
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Re: What’s “your number” for each kid’s 529?

Post by SmileyFace »

I targeted 50-75% of in-state (flagship) University undergrad tuition/room&board per child.
One still left in college and using remaining funds for Master's Degree.
In my case, I saved thousands in taxes so certainly have no regrets.
Some of the large numbers discussed here seem very high to me.
Last edited by SmileyFace on Wed Oct 28, 2020 11:21 am, edited 3 times in total.
financiallycurious
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Re: What’s “your number” for each kid’s 529?

Post by financiallycurious »

$250k per kid sounds like a reasonable stopping point. I originally thought I'd start at birth and contribute $14k (then $15k) per kid per year, using annual gift tax limit as a measure, and stop when each account got to about $100k, which at the time I started was the full cost of attendance at our state flagship university. However, I didn't stop when the first account got to $100k because my husband and I both went to private colleges and graduate school, so it didn't feel right to assume that our kids will want less than what we had, and I've seen our friends with older kids struggle to put their kids through school and don't want to end up like them. More than the tax free growth (which is substantial, after 9 years and luck, over 40% of their combined account values is attributable to growth), I like the psychological reward of knowing that their college is funded and the funds are as protected as possible, even if we lose our jobs, get divorced, one of us dies, some other "emergency" comes up.
stimulacra
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Re: What’s “your number” for each kid’s 529?

Post by stimulacra »

Four years in-state public tuition at a flagship campus is my baseline goal. Room and board would be a nice to have.

So for me I'm targeting University of Texas Austin in 2030 and 2040.

A big part of that is preaching the virtues and values of state schools. Luckily Texas has lots of great options for public universities and plenty roomy enough to be far away from home and still pay in-state tuition.
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Re: What’s “your number” for each kid’s 529?

Post by KlangFool »

vasaver wrote: Wed Oct 28, 2020 11:01 am
KlangFool wrote: Wed Oct 28, 2020 10:57 am
vasaver wrote: Wed Oct 28, 2020 10:35 am
KlangFool wrote: Wed Oct 28, 2020 9:40 am OP,
Zero.
I paid for my kids' college education through my annual savings.
KlangFool
arsenalfan wrote: ↑Wed Oct 28, 2020 9:23 am
When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Arsenalfan - Those are great numbers - especially with all that taxfree growth. Klangool - why didn't you do something like this?
vasaver,

<<Klangool - why didn't you do something like this?>>

I am not that rich. 529 provide little to no tax benefits to me.


KlangFool
1k a month...even $500 or $250 and skipping a few years could work out nicely. Would you have received a state tax benefit to sweeten the pot?

vasaver,


1) Why would I choose to pay the bigger Federal Income Tax in order to save the smaller state income taxes? 529 is an after-tax contribution.


2) I was unemployed for more than 1 year a few times. Until my kid started college, I have no idea whether I can afford to pay for a college education.


3) Until Telecom Bust, with my saving rate, I am about to early retire a few years before my kids go to college. So, why would I choose to reduce my kids' financial aid eligibility by contributing to the 529?


4) If I am even richer, why won't I contribute to my kids' Roth IRA instead? That is 50 years to 60 years of tax-free growth.


KlangFool
KlangFool
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Re: What’s “your number” for each kid’s 529?

Post by KlangFool »

vasaver wrote: Wed Oct 28, 2020 11:02 am
Vulcan wrote: Wed Oct 28, 2020 10:58 am
anon_investor wrote: Wed Oct 28, 2020 10:58 am I also think KlangFool's state does not offer a state income tax deduction, which makes it even worse.
Same here.
I thought he was in Virginia?

Yes, I am.


KlangFool
bloom2708
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Re: What’s “your number” for each kid’s 529?

Post by bloom2708 »

anon_investor wrote: Wed Oct 28, 2020 11:03 am
bloom2708 wrote: Wed Oct 28, 2020 11:03 am $50k 529 (small state tax benefit)
$50k taxable

For each kid (3 kids, 1 currently in college, another next fall).

So far so good.
How much did you put in each year to the 529 plan?
I started each with a lump sum, say $2,500 and then did $100/month. Also adding lumps when I received a bonus or sold stock options.

It is interesting to show the earnings for each kid. Oldest kid born in 2000 had far lower earnings. Youngest kid born in late 2007 has had a good run. Her earnings are far higher than the other 2 kids born earlier. Timing based on big market dips and related.

I'm still saving for the 2 kids not in college. Same strategy. Monthly and occational lumps until getting to goal.

Middle kid is likely going to Kansas U. First year looks to be about $22k in the dorm with full meal plan. With that and 4 years she should be good. It gets cheaper living off campus with no meal plan. At least it did for oldest kid.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
boglebill
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Re: What’s “your number” for each kid’s 529?

Post by boglebill »

We may cashflow other expenses that our plan doesn't cover. Situation dependent (them and us).

We purchased state prepaid plans for our kids. No matter what tuition rates are they can earn a bachelor's degree. If they go out of state, there is coverage up to the in-state hourly amount.

If they get scholarships, the prepaid money can be refunded (and reused).
We have about 10k each in 529s that will cover other educational expenses. We have stopped contributing.

The kids need to strive for scholarships and we'll make sure they can get a good education without going into debt.

We don't believe hundreds of thousands of dollars for higher education makes sense. If they get into ivy league or want to be surgeons, we'll help if we can, without going off course or sinking our ship.
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anon_investor
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Re: What’s “your number” for each kid’s 529?

Post by anon_investor »

KlangFool wrote: Wed Oct 28, 2020 11:30 am
vasaver wrote: Wed Oct 28, 2020 11:02 am
Vulcan wrote: Wed Oct 28, 2020 10:58 am
anon_investor wrote: Wed Oct 28, 2020 10:58 am I also think KlangFool's state does not offer a state income tax deduction, which makes it even worse.
Same here.
I thought he was in Virginia?

Yes, I am.


KlangFool
My mistake.
Normchad
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Re: What’s “your number” for each kid’s 529?

Post by Normchad »

We started the 529 when the kid was 2. We didn’t have a specific goal. At that point, we just wanted to be sure that she could get a college education.

At that age, you don’t know what college will cost in the future, or if your kid will go, or if the kid will have siblings, etc. we weren’t even convinced we’d be living in the same state all those years. So we did a 529, but not the prepaid plan.

For many years, I put all my bonuses and overtime pay into it. When she graduated HS, there was about 107K in there. I probably only contributed 50% of it......

The smartest thing we ever did, was talk to her about this early and often. The short version is “we saved this money for your school. If it’s not enough, you need to cover the rest. If there are leftovers after graduation, it’s yours to keep”. She always referred to it as her “Ferrari Fund”.

So we never had to have hard talks about financing school. And she was motivated to keep costs down. When it was all over, she graduated debt free and had $70K in her pocket.
wilked
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Re: What’s “your number” for each kid’s 529?

Post by wilked »

I think the standard recommended is $250K. We are aiming for close to that
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anon_investor
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Re: What’s “your number” for each kid’s 529?

Post by anon_investor »

KlangFool wrote: Wed Oct 28, 2020 11:27 am
vasaver wrote: Wed Oct 28, 2020 11:01 am
KlangFool wrote: Wed Oct 28, 2020 10:57 am
vasaver wrote: Wed Oct 28, 2020 10:35 am
KlangFool wrote: Wed Oct 28, 2020 9:40 am OP,
Zero.
I paid for my kids' college education through my annual savings.
KlangFool
arsenalfan wrote: ↑Wed Oct 28, 2020 9:23 am
When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Arsenalfan - Those are great numbers - especially with all that taxfree growth. Klangool - why didn't you do something like this?
vasaver,

<<Klangool - why didn't you do something like this?>>

I am not that rich. 529 provide little to no tax benefits to me.


KlangFool
1k a month...even $500 or $250 and skipping a few years could work out nicely. Would you have received a state tax benefit to sweeten the pot?

vasaver,


1) Why would I choose to pay the bigger Federal Income Tax in order to save the smaller state income taxes? 529 is an after-tax contribution.


2) I was unemployed for more than 1 year a few times. Until my kid started college, I have no idea whether I can afford to pay for a college education.


3) Until Telecom Bust, with my saving rate, I am about to early retire a few years before my kids go to college. So, why would I choose to reduce my kids' financial aid eligibility by contributing to the 529?


4) If I am even richer, why won't I contribute to my kids' Roth IRA instead? That is 50 years to 60 years of tax-free growth.


KlangFool
I agree with KlangFool's reasoning (at least how I am interpreting it), if you are foreging any tax advantaged space, then 529 plans are a bad deal.
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alpenglow
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Re: What’s “your number” for each kid’s 529?

Post by alpenglow »

I max 403b, 457, and Roths. I also add $10k/year to the kids 529s. NY gives a nice deduction so I like the immediate "return" on investment. Hopefully the 529s will have $250k total ($125k/child).
smitcat
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Re: What’s “your number” for each kid’s 529?

Post by smitcat »

wilked wrote: Wed Oct 28, 2020 11:54 am I think the standard recommended is $250K. We are aiming for close to that
Curious whos standard recomendation?
How does one estimate that $250K current is needed for college?
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KingRiggs
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Re: What’s “your number” for each kid’s 529?

Post by KingRiggs »

Contributed to each of my 2 kids’ 529s until I hit $100k each, at about age 12. Then contributed enough to max my state tax credit ($5k).

Each had bout $200k when starting college.

One went to State Flagship U at total cost of about $100k. Second is at elite non-Ivy which will cost about $300k for 4 years. Worked out pretty well.
Advice = noun | Advise = verb | | Roth, not ROTH
stoptothink
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Re: What’s “your number” for each kid’s 529?

Post by stoptothink »

smitcat wrote: Wed Oct 28, 2020 12:13 pm
wilked wrote: Wed Oct 28, 2020 11:54 am I think the standard recommended is $250K. We are aiming for close to that
Curious whos standard recomendation?
How does one estimate that $250K current is needed for college?
I guess if your plan is expensive private or OOS is the only option, that might possibly be "the standard". For the rest of us :shock: .
Njm8845
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Re: What’s “your number” for each kid’s 529?

Post by Njm8845 »

arsenalfan wrote: Wed Oct 28, 2020 10:01 am
Njm8845 wrote: Wed Oct 28, 2020 9:40 am
arsenalfan wrote: Wed Oct 28, 2020 9:23 am When our kids were born, financial advisor advised us to do $1k per kid per month, Utah aggressive/very aggressive.
With a 14yo and 11yo, that's gotten us to $300k and $270k.
We've stopped contributing to the 14yo's 529.
Just curious, how do you plan on using all of the $300k?

Even at an elite private at 60k/yr, looks like you’ll have a decent amount left over.
Have a nephew at an elite - first year was $75k all-in.
Also, grad school.
Leftovers for both, probably let compound and then rename to grandkids.

Like all "your number" questions, pretty personal and YMMV.
Yeah, Mine was an honest question. Good idea on the grandkids. I was always worried any contributing too much, but that’sa good option.
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