How much are you putting in a 529?

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PlayingLife
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How much are you putting in a 529?

Post by PlayingLife » Sat Jan 06, 2018 8:30 am

BH's,

Curious to hear about everyone's funding strategy for 529s. We have one child turning 2 soon and hope to have one more in the future. Balance at end of 2017 was a little over $8K. Right now I'm planning to deposit $5K per year in the 529 for child one, and another $5k per year once child 2 hopefully arrives someday.

I don't have any hard questions but would like to hear about people's contribution strategies - it of course depends on # of children and overall handling of your financials. We do maximize all retirement accounts before 529 and put a significant sum in an HSA - we only save in taxable accounts to keep our emergency fund full and for big purchases like home additions, vehicles, etc. For us, if we no longer had a need to save in taxable, and ended up with extra money, we have made the decision to put it towards the principle of our mortgage (3 1/2 years into a 4.125% mortgage with a $340K balance).

Thanks for all your stories!

livesoft
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Re: How much are you putting in a 529?

Post by livesoft » Sat Jan 06, 2018 8:34 am

A Tale of Two 529 Plans: viewtopic.php?t=107916
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LEB1230
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Re: How much are you putting in a 529?

Post by LEB1230 » Sat Jan 06, 2018 8:37 am

Our state offers a tax incentive up to 5k, so we contribute that amount each year. We only plan to pay half as we expect our children to have some responsibility for paying for their college education. If we don't have enough in the 529's our kids go to college we will cash flow the rest.

PlayingLife
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Re: How much are you putting in a 529?

Post by PlayingLife » Sat Jan 06, 2018 8:41 am

LEB1230 wrote:
Sat Jan 06, 2018 8:37 am
Our state offers a tax incentive up to 5k, so we contribute that amount each year. We only plan to pay half as we expect our children to have some responsibility for paying for their college education. If we don't have enough in the 529's our kids go to college we will cash flow the rest.
Ah should have pointed that out - I'm out of state, contributing to NY's plan. No incentive here but of course that influences your decisions, thanks.

bf0123
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Re: How much are you putting in a 529?

Post by bf0123 » Sat Jan 06, 2018 8:48 am

We have 4 kids. We've contributed when we could to all four over the years (separate accounts...still not sure if it matters whether they are separate or not for FAFSA reasons). But we also have a sizable number of EE and I Bonds we plan to use for college costs. My understanding is: the earnings on EE and I Bonds can be tax free if used for college expenses OR for contributing to 529. So once they enter college, I'll convert EE and I to 529 and pay from there.

With new law changes (and because I live in state that allows for 529 deductions), I also plan to pay their K-12 private tuition out of the 529.

Soon2BXProgrammer
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Re: How much are you putting in a 529?

Post by Soon2BXProgrammer » Sat Jan 06, 2018 8:49 am

I am *effectively* done funding their 529 account. they are approximately 80% of 4 years of in state tuition/room&board/food/etc.

Once a year, when new prices come out for the flagship school in our state, i will compare the new cost to where our account is.

I am treating it somewhat how a pension provider does. If it is too far under, because of poor markets, i might make a contribution to help it recover faster, but if its just a little down, oh well. and if its ahead, great, that will help the next time it goes down.
50stock/50bonds, ages 7 & 5.

Why not 100%? because i the other tax credits are more generous for paying it out of other funds/income.

mptfan
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Re: How much are you putting in a 529?

Post by mptfan » Sat Jan 06, 2018 8:52 am

Zero.

livesoft
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Re: How much are you putting in a 529?

Post by livesoft » Sat Jan 06, 2018 8:58 am

bf0123 wrote:
Sat Jan 06, 2018 8:48 am
My understanding is: the earnings on EE and I Bonds can be tax free if used for college expenses OR for contributing to 529. So once they enter college, I'll convert EE and I to 529 and pay from there
There are income limits if one wishes to have those bonds tax-free for education. Personally, I think one would make more after tax investing elsewhere, so the nudge to use EE bonds is the wrong kind of government nudge.
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warner25
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Re: How much are you putting in a 529?

Post by warner25 » Sat Jan 06, 2018 9:01 am

Two kids here, 3 and 1, and we set up 529s (also out-of-state using the NY plan since my state has no income tax incentive) as soon they were born, mainly to encourage family members to give the gift of savings rather than tons of toys. That has been largely unsuccessful... we're drowning in toys and the 529 balances are minimal.

Our original plan was to max out retirement accounts, contribute any surplus savings to a taxable account, and figure out big things like college when the time comes (use my GI Bill, cash flow it, and/or take from taxable as necessary). But this year we'll start funding the 529s ourselves to have money earmarked for college (also similarly earmarking a taxable account as "house savings" and making regular contributions to that). It may not be optimal, but the idea is to start establishing clear expectations for both ourselves and our kids about what we'll pay rather than trying to divide up a big pile of money later. I think we'll start with about $5k/year, and ramp it up over time with pay raises to maybe $20k/year. We won't max out retirement accounts this year, but will again soon.

It's very difficult at this stage to decide how much to put in. We don't know how many kids we'll ultimately have, or what portion of college we can/should actually cover for them. The savings plan described above will probably cover most of it, and we'll just have to adjust and make final decisions when we get a lot closer.

Soon2BXProgrammer
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Re: How much are you putting in a 529?

Post by Soon2BXProgrammer » Sat Jan 06, 2018 9:09 am

livesoft wrote:
Sat Jan 06, 2018 8:58 am
bf0123 wrote:
Sat Jan 06, 2018 8:48 am
My understanding is: the earnings on EE and I Bonds can be tax free if used for college expenses OR for contributing to 529. So once they enter college, I'll convert EE and I to 529 and pay from there
There are income limits if one wishes to have those bonds tax-free for education. Personally, I think one would make more after tax investing elsewhere, so the nudge to use EE bonds is the wrong kind of government nudge.
Also, if you have held the EE bonds for a substantial amount of time. there is effectively a huge penalty for not making it to 20 years. I think you should model the cost of cashing out an EE bond before the "guarantee of doubling" occurs at 20 years.

Beachdrinks
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Re: How much are you putting in a 529?

Post by Beachdrinks » Sat Jan 06, 2018 9:11 am

warner25 wrote:
Sat Jan 06, 2018 9:01 am
Two kids here, 3 and 1, and we set up 529s (also out-of-state using the NY plan since my state has no income tax incentive) as soon they were born,
mainly to encourage family members to give the gift of savings rather than tons of toys. That has been largely unsuccessful...
:D makes me happy. I’m 0 for 118 trying this same thing. I have given gifts in this manner. Someone will thank me more in 18 years
we're drowning in toys and the 529 balances are minimal.

Our original plan was to max out retirement accounts, contribute any surplus savings to a taxable account, and figure out big things like college when the time comes (use my GI Bill, cash flow it, and/or take from taxable as necessary). But this year we'll start funding the 529s ourselves to have money earmarked for college (also similarly earmarking a taxable account as "house savings" and making regular contributions to that). It may not be optimal, but the idea is to start establishing clear expectations for both ourselves and our kids about what we'll pay rather than trying to divide up a big pile of money later. I think we'll start with about $5k/year, and ramp it up over time with pay raises to maybe $20k/year. We won't max out retirement accounts this year, but will again soon.

It's very difficult at this stage to decide how much to put in. We don't know how many kids we'll ultimately have, or what portion of college we can/should actually cover for them. The savings plan described above will probably cover most of it, and we'll just have to adjust and make final decisions when we get a lot closer.

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ClevrChico
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Re: How much are you putting in a 529?

Post by ClevrChico » Sat Jan 06, 2018 9:25 am

My goal has changed over the years, and I'm now trying to fully fund the cost of of a public undergrad degree for each of the two kids with 529 plans.

autopeep
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Re: How much are you putting in a 529?

Post by autopeep » Sat Jan 06, 2018 9:26 am

We have 1 kid who is about to turn 2. We are contributing 6000/yr currently. We will likely increase this amount once she is in school and we have a better sense of her aptitude and interest. Like livesoft, we do not consider the 529 as distinct from the rest of our portfolio

TroutMD
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Re: How much are you putting in a 529?

Post by TroutMD » Sat Jan 06, 2018 9:49 am

Hello:

We are in TX, so no tax benefit. We have 529 setup in Utah.

Three kids, ages 6, 4, 1.

We did 20K when they are born, and add 1K at their birthdays. The account values are 45K, 35K, and 22K.

Invested in low cost index funds, 80 stock/20 bonds.

Likely next year, when/if we decide we are 'done' on the number of kids, we will increase the amount each get or may do another 'balloon' type at an arbitrary age. (Say 10K at 7 years old). Trying best to keep our contribution equal to each kid.

The oldest two are in private school. The oldest is in K and cost about 7K a year. The middle is in a primer that is about half that.

We probably wont pay for any private school out of the 529, I think the better benefit is longer term/college. I am 37, DW is 36. We can afford the school now, I don't want to have to work to pay for their college nor see them struggle to pay for it.

Not sure all our ideas are right, but it maps out well. We don't feel the need to 100% pay for their school, whatever their account is worth, is what they will have. Our original goal was 100K at 18, but I think we will surpass that, and with the sky rocketing cost of school, we need to....

We do consider this NOT part of our personal portfolio. I consider it money that is gone/spent. If it comes back to us, its a bonus at that time.

The kids don't know about, we don't intend to tell them until its college time. Maybe this post needs deleted some day. They are already googling stuff. Ugh.

Pigeon
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Re: How much are you putting in a 529?

Post by Pigeon » Sat Jan 06, 2018 9:57 am

We live in a state with high state taxes that allows a deduction up tp $10K per year total. We have 2 kids. We've paid $5k for each of them in recent years, a bit less before that.

Our goal with education is to pay completely for 4 years of instate public college. At least one of the kids will be going to an expensive grad professional program. If there is extra in the 529 she can apply it to that.

livesoft
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Re: How much are you putting in a 529?

Post by livesoft » Sat Jan 06, 2018 9:58 am

We have benefited from having income low enough while our children were in college to be able to get $2,500 a year for each student from the American Opportunity Tax Credit. Since a 4-year college degree is actually spread out over 5 tax years, for one of our students we will get also get the $2,000 Lifetime Learning Credit.

Readers may also be interested in reading about how 97% of eligible families do not use 529 plans in a discussion started by Taylor Larimore:
viewtopic.php?t=146595
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bf0123
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Re: How much are you putting in a 529?

Post by bf0123 » Sat Jan 06, 2018 9:59 am

My EEs double at 17 years I believe...and that coincides with when my first kid goes to college. So I plan to hold, get the doubling (roughly 4.1%...not too shabby, especially tax free) then put in 529.

I decided on that strategy about 5 years ago--at that time I was thinking along your lines of selling the EEs and putting in taxable stock account. But figured 4.1% guaranteed was a good number in short run.

winterfan
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Re: How much are you putting in a 529?

Post by winterfan » Sat Jan 06, 2018 10:07 am

We made a couple of lump sums into our 8 yo child's 529 during her first year. She is 8 and there's about 42K in it. Right now that will pay for about two years (tuition and R&B) for a state school. We put an additional 1K in per year. I don't want to put too much in since we can't roll it to another child.

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Thrifty Femme
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Re: How much are you putting in a 529?

Post by Thrifty Femme » Sat Jan 06, 2018 10:13 am

2k per child to get the state tax deduction.

OldSport
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Re: How much are you putting in a 529?

Post by OldSport » Sat Jan 06, 2018 10:20 am

$3k to open plus $250/month. That should be sufficient to cover most tuition and fees at best public school in our state. We do not want to overfund, due to restrictions on qualified withdrawals.

We consider expensive private school a waste of money in most cases.

Broken Man 1999
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Re: How much are you putting in a 529?

Post by Broken Man 1999 » Sat Jan 06, 2018 10:39 am

! am funding youngest grandson's 529 plan @ $200/month. When his balance reaches $3000, I will transfer his account to Vanguard, and then split the $200/month into four streams to add $50/month to all grandchildren's 529 plans, or possibly a higher amount.

The 529 plans are in addition to their paid for tuition plans, so I am not going to stuff them so full as I would if tuition wasn't already paid. Plus the grandchildren's other grandparents are also contributing to 529 plans.

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Bacchus01
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Re: How much are you putting in a 529?

Post by Bacchus01 » Sat Jan 06, 2018 10:43 am

We put up to the state tax deduction ($3,140) for each of our three kids plus for my wife and I. Roughly $15,709 a year and state tax deductible

supersecretname
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Re: How much are you putting in a 529?

Post by supersecretname » Sat Jan 06, 2018 10:49 am

I have two kids. My goal is to have 2 years of state school funded for each when they reach 18. That way if one gets a scholarship, I can move funds to the other one.

I’m reality, I get a 2500 state tax break for each, so that is what I’m contributing. And another 2500 in my name to be used for whichever one needs it.

Our flagship(UMD) is a good school, so not planning on paying for/encouraging private.

deskjockey
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Re: How much are you putting in a 529?

Post by deskjockey » Sat Jan 06, 2018 11:12 am

We put $8,000 into 529s for each of our two kids every year, and have done so since birth. This gives us a nice tax benefit in VA, since we use the Invest529 plan. We've got about $185K in their accounts as of now and plan to fund it until we have enough to fully pay for in-state attendance at UVA. If by then (in roughly 4 years, unless the market tanks) we've got a sense that one or both could shoot for the ivies, we'll continue funding the 529.

DrGoogle2017
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Re: How much are you putting in a 529?

Post by DrGoogle2017 » Sat Jan 06, 2018 11:15 am

I did put $250 each per child in year 2001, there was a $50 bonus per account, hence my reason for contribution. Immediate 20% gain. I think it might grew to double the amount by the time child #1 went to college. But her college bill was paid by credit card and 2% refund was deposited to child #2 529 account. So by the time she went to college, she had about $5k. So I liquidated and gifted her as a high school graduation gift. She used it to buy a lap top.

But honestly, in my state, no deduction, I found it was limiting. I invested outside of 529 for college. In the end, we used earned income to fund college. During those years, we had reduced savings rate. We didn’t have to sell our after tax to fund anything.

However, I think I might fund my potential future grandchildren’s 529 account, like birthday gifts for example.

pindevil
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Re: How much are you putting in a 529?

Post by pindevil » Sat Jan 06, 2018 11:18 am

As of today our only source of funding for the 529 is the fidelity rewards credit card. I haven't looked lately but I believe there is ~7k in there since starting in 2014.

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Go Blue 99
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Re: How much are you putting in a 529?

Post by Go Blue 99 » Sat Jan 06, 2018 11:19 am

We are aiming to put in $4k a year for each kid (that's the state deduction amount for us). We also put any cash gifts into the plans. My parents will probably help fund the accounts also.

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TNL
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Re: How much are you putting in a 529?

Post by TNL » Sat Jan 06, 2018 11:21 am

winterfan wrote:
Sat Jan 06, 2018 10:07 am
We made a couple of lump sums into our 8 yo child's 529 during her first year. She is 8 and there's about 42K in it. Right now that will pay for about two years (tuition and R&B) for a state school. We put an additional 1K in per year. I don't want to put too much in since we can't roll it to another child.
This is about where I am at. Single parent, one child only, my parents and I put in a total of $7500 when the account was opened when child was 6 months old in 2007. Market went down, we kept putting about $1K a year in. Child is now 10 and account sitting about $30K. Right now that would cover almost 2 years of tuition/R&B at a state school. From account inception until August 2017 the account was 100% invested in the Fidelity Spartan 500 and Fidelity Total Market Index. In August I moved it to a Target 2030 fund even though my son will graduate from HS in 2025. I felt that the 2025 and 2027 target funds started moving to cash too early. I plan to pay for college one half from the account and one half from cash flow.

aceoperations
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Re: How much are you putting in a 529?

Post by aceoperations » Sat Jan 06, 2018 11:23 am

I am funding $5k/year for each of my two kids, ages 2.5 and 0.75 in Vanguard 529 (live in CA). While I have income to spare I would like to load up on some 529 and then have the option to stop contributions at some point in the future when there is lesser need or disposable income (like when we stop renting and pick up a mortgage).

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Re: How much are you putting in a 529?

Post by Jack FFR1846 » Sat Jan 06, 2018 11:23 am

$2000 a year through fidelity rewards card to get the $100 state tax break. Son is in college now, so once I hit $2k, I pull it out.
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TreeBeard
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Re: How much are you putting in a 529?

Post by TreeBeard » Sat Jan 06, 2018 11:31 am

Good comments above. I think it’s important to determine your goal for the 529s. Do you want them to fund 80% of educational costs? This approach is recommended by some so you don’t “overshoot” and have some left over in the 529. Others may intentionally fully or overfund the 529s to take advantage of the protected tax space, with the idea the 529s would be a wealth transfer vehicle after school is paid for - i.e. transfer funds to future grandkids or other family members/etc for education costs. The latter should probably only be considered if you’ve got all your other financial ducks in a row and are just looking for extra places to stash money.

I think you’re on the right track, but should plan on reassesing every few years. You may find that in 10-15 years you can switch your 529 contributions to other things - boost retirement savings for one.

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bligh
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Re: How much are you putting in a 529?

Post by bligh » Sat Jan 06, 2018 11:36 am

We are shooting for 100% of 4 years of instate college tuition into the 529 plans for each kid. The idea is to front load the contributions early so we can enjoy a long period of growth. Once the kids turn 10 I expect to completely stop contributing to the 529 plans since my state offers no income tax benefit. We would pay for any excess expenses from taxable accounts or just cash flow it.

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Re: How much are you putting in a 529?

Post by letsgobobby » Sat Jan 06, 2018 11:37 am

Each child has ten years of tuition, room, and board for our in state flagship university. We don't add any more but are 100% invested in stocks. We are weighing adding another six years of tuition only per child in a prepaid college plan.

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Re: How much are you putting in a 529?

Post by dogagility » Sat Jan 06, 2018 11:55 am

Two kids currently in college. We started saving in 529s when they were toddlers, and the money was invested 100% in stock up until they were early high school age. At that point, we had a saved a little less than 4 years of in state flagship cost of attendance, minus the money needed for the college tax credit over four years ($16,000/child).

We saved about the right amount per child for where they ended up attending minus scholarships. However, when kids are young, it's difficult to know where (or even if) your kids will attend college. As your kids age, you will have a better handle on college expenses.

Typical advice is to save expecting your kids will be full pay at your in state flagship university and adjust this goal as you acquire more information in later years.
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TSWNY
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Re: How much are you putting in a 529?

Post by TSWNY » Sat Jan 06, 2018 12:20 pm

We live in NY and use the NY Plan for both kids (3 and 1). NY allows for a deduction up to $10,000 per year on state taxes, so each girl is getting $5,000 per year.

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Re: How much are you putting in a 529?

Post by Johnny Thinwallet » Sat Jan 06, 2018 1:12 pm

We're in Ohio and have a six month old son. We're contributing $2k per year initially using the Ohio 529 plan, and we do receive a state tax deduction. Our 529 plan is to try to cover 75-80 percent of tuition/fees/books at our (wife and I) alma mater, which is in-state Public U. Problem is I'm not sure what that tuition/fees/books amount will be in 17+ years - currently it's roughly $12k per year.

Ohio did increase the amount you can deduct up to $4k starting in 2018, but we're going to hold at $2k per year for a bit until we have a better idea on the amount we'll need. I'd rather under-fund than over-fund.

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Re: How much are you putting in a 529?

Post by mass_biker » Sat Jan 06, 2018 1:16 pm

We aim to have contributed 100k per kid (we have 3) by their 5th birthday - assuming we have maxed out other buckets (401k, TIRA etc.)
No exact science. Since we moved to a state that allows a modest tax credit on contributions, we also add that amount each year per 529. Our asset allocation for these is 100% equities. But as #1 enters high school (next year) we might shift that to a more conservative mix.

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Re: How much are you putting in a 529?

Post by majiaknight » Sat Jan 06, 2018 1:21 pm

Living in CA w/ one 3-year old and no state tax incentives. Yesterday I just increased my 529 auto-invest from bi-weekly $200 to $600 after learning the expansion of 529 to be used for K-12 (max. $10K/Y) due to the new tax reform.

Current balance is ~$11K. We plan to send the kid to private schools (not good school district where we live) so we may add several big lump-sum contributions in the next two years to let it grow tax-free. We also plan to fully cover my kid's college educations.

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Re: How much are you putting in a 529?

Post by tulsuduke » Sat Jan 06, 2018 2:27 pm

We're contributing a combined $325 per month for each of our 4 children. Our children each has two different accounts opened, one from myself and one from my wife. Our state allows us to deduct up to $4800 from state inctaxes per beneficiary per year for married couples filing jointly

The way I see it, this should be enough to fund most of the cost of in-state tuition. If they are smart enough to earn at least a partial, 50% academic scholarship from a private school, then the 529 should cover the majority of the rest.

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Re: How much are you putting in a 529?

Post by LadyGeek » Sat Jan 06, 2018 2:38 pm

This thread is now in the Personal Finance (Not Investing) forum (investment planning).

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Re: How much are you putting in a 529?

Post by runner3081 » Sat Jan 06, 2018 3:24 pm

One child, age 5. We are putting in $50 per month. There is a state tax advantage.

Our intent is not to fund her college expenses completely.

We will pay 2 years tuition at a local community college, then 2 years of in-state tuition at a public school. Anything beyond is up to her (including room and board).

We will most likely cash flow most of the expenses as they come up ad we are hyper-focused on retirement and paying off the mortgage at the moment.

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eye.surgeon
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Re: How much are you putting in a 529?

Post by eye.surgeon » Sat Jan 06, 2018 3:28 pm

I have enough to pay all of a state school education. less than $100k.

I'm surprised how many otherwise-frugal bogleheads send their kids to expensive private universities costing hundreds of thousands of dollars. At least in my profession, an expensive private medical school degree from Harvard gets you exactly zero dollars more income than state U.
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Re: How much are you putting in a 529?

Post by dmagic » Sat Jan 06, 2018 3:37 pm

If one lives in NJ and works in Manhattan, would I still qualify for the NY 529 tax deduction since I still pay NY state taxes?

harvestbook
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Re: How much are you putting in a 529?

Post by harvestbook » Sat Jan 06, 2018 4:08 pm

We got a fairly late start but now have around $46K in senior year. I stopped contributing to the 529 two years ago and switched to a UTMA account and Roth for the child. The UTMA will be the first backup, and then I will cash flow/take out of my taxable.

However, based on FASFA report and what the targeted colleges typically give in grants and aid (work study, scholarships, etc.), we'll probably not even use it all. But this year the plan became "go to med school," so a 529 continuing to grow 4 more years will be a good thing.

In other words, things probably won't work out exactly as you project, but will probably work out nevertheless. A little effort, attention, and time does wonders.
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StevieG72
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Re: How much are you putting in a 529?

Post by StevieG72 » Sat Jan 06, 2018 4:30 pm

State of Va. allows $4,000 deduction per account. Each seperate fund has to be a seperate account.

I put in $10,000 ( fully deductable) last year and plan to do so for the next 4 yrs. 3 fund portfolio 60/40.

This contribution should help pay for a good portion of in state tuition.

As long as the kiddo gets good grades I don’t mind helping out with tuition.

Retirement accounts are funded, funding kids education will hopefully allow her to establish herself and be less dependent on mom & dad.

Of course it is a crap shoot. My niece got a 4 yr. art degree six years after starting college and is currently working as a lifegaurd / pool manager. :oops:
Fools think their own way is right, but the wise listen to others.

Nate79
Posts: 3491
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: How much are you putting in a 529?

Post by Nate79 » Sat Jan 06, 2018 5:08 pm

$300/month in Oregon 529 to cover most of instate tuition at State university and get the state tax deduction.

drew
Posts: 52
Joined: Tue Mar 27, 2007 12:04 pm

Re: How much are you putting in a 529?

Post by drew » Sat Jan 06, 2018 5:10 pm

Our plan is a work in progress. We intend to have enough in a 529 today to pay for 80-90% of 4 years of state university at $30k/year under the following assumptions:

6% annual portfolio growth (nominal)
3% annual growth in college costs
$10k withdrawals per kid at the end of calendar year for private elementary and high school tuition. Skip withdrawals in down markets and use cash flow those years instead.

SCV_Lawyer
Posts: 59
Joined: Sun Nov 20, 2016 3:24 pm

Re: How much are you putting in a 529?

Post by SCV_Lawyer » Sat Jan 06, 2018 6:18 pm

We have two daughters, 12 and 9. Currently, 529 balances are $95K and $90K, respectively. In 2018, we will add $1,050/mo for the older DD and $800/mo for the younger, for a total of $22,200. Each successive year, we inflate the total contributions by $100/mo, so next year will be $1,950/mo ($1,100 and $850). We will continue this at least until HS graduation, and then if needed, through college years.

Our 529 is the Utah plan.

ChrisC
Posts: 696
Joined: Tue Jun 19, 2012 9:10 am
Location: North Carolina

Re: How much are you putting in a 529?

Post by ChrisC » Sat Jan 06, 2018 6:20 pm

deskjockey wrote:
Sat Jan 06, 2018 11:12 am
We put $8,000 into 529s for each of our two kids every year, and have done so since birth. This gives us a nice tax benefit in VA, since we use the Invest529 plan. We've got about $185K in their accounts as of now and plan to fund it until we have enough to fully pay for in-state attendance at UVA. If by then (in roughly 4 years, unless the market tanks) we've got a sense that one or both could shoot for the ivies, we'll continue funding the 529.
That's a lot of dough going towards financing postsecondary education. Times have a changed when we first started down that road in Virginia for our 3 kids, born in 1981,1984, and 1986. At that time we used EE Savings Bonds, initially, with the goal of having $25k for each kid at HS graduation. When 529 plans became available in 1997 in Virginia, they were limited to prepaid tuition plans for VA schools. So, at the time it made sense for us to buy one fully paid tuition contract.

Our goals for financing and supporting college educations called for us to pay for all tuition and room/board expenses, pay for computer equipment and cars, but all other personal expenses would be met from student earnings in high school and college -- the latter included clothing, entertainment and off campus lodging. Not sure our plans would have worked out if kids didn't get great deals from UVa and USNA or decided to go to any of selective private schools that also selected them, including Duke, Cornell, Columbia, UNC-Chapel Hill. At UVa, kid no 1 got a full ride on tuition so she was able to use her savings and most of her Savings Bonds for graduate school. Kid no. 2 wound up at USNA, later served in the USMC, and after military service went to Cal-Bk for grad school -- he still has some of those Savings Bonds. Kid no. 3 used our 529 contract at Uva and some of her Savings Bonds later at Uva Law School.

Plans for financing college education is one of several projections the family has to make for adulthood for children. I do think living in Virginia with exceptional state schools made things easier for us.

For grandkids, we are committed to put away $5k annually for 529 plans, investing in aggressive growth strategies. We have a 2 year old grandson now and another grandchild due in June. We'll revisit commitment as time passes.
Last edited by ChrisC on Sat Jan 06, 2018 7:07 pm, edited 1 time in total.

indyfish
Posts: 29
Joined: Wed Jan 09, 2013 8:22 am

Re: How much are you putting in a 529?

Post by indyfish » Sat Jan 06, 2018 6:32 pm

One 10 month old daughter. Indiana has a 20 percent tax credit up to 5000, so we contribute 5000. My mother also contributes 5000 to get the tax credit, and my father 3000 for his state’s tax deduction. The tax credit in Indiana is too good to pass up.

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