Reached 4M target. Taking money off table. Advice?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Posts: 30
Joined: Wed Nov 29, 2017 2:03 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by JSnyder » Thu Dec 07, 2017 8:51 am

inbox788 wrote:
Wed Dec 06, 2017 11:16 am
JSnyder wrote:
Sat Dec 02, 2017 12:40 pm
My goals for the short term:
1. 50K in 2018 and 2019 for my son's eduction
2. 50K in 2021 and 2022 for my daughter's eduction
3. 3 years (300K) in my cash equivalent fund (vanguard admiral corporate short term bonds)
Depending on how you're saving and whether you're transferring the education funds, you might want to keep to the $14k individual ($28k couple) annual limit. For example, putting $50k into a 529 2 consecutive years is asking for additional compliance requirements and possible reduction in lifetime transfers. Putting $25k for 4 consecutive years is simpler, and achieves mostly same result, no?

If you're keeping it in your own account, it might not matter as much, but you give up potential benefits. Wealth transfer is an area that's full of opportunities if you know what you're doing or find the right adviser, but sorting out the right ones from the AUM fee collectors is difficult. And unless you're talking about a lot of wealth, chances are the savings aren't going to overcome the high fees.
I took your advice on this. Where I live I can deduct 20K for a married couple put into a 529 plan per year. The state tax rate here is 4.5% so this represents a $900 savings. And as you indicate this contribution is also is below the gift tax rate. So I created and put 20K in a 529 plan for my son. I will contribute another 20K per year over the next 4 years.

In year 3 (Fall 2019) I will ask my parents to contribute 20K. As I suspect I will need a total of $100K. By then we will have a better idea of the actual amounts needed and how seriously my son is taking his education. That would be his senior year in college.

Good advice. Thank you.

Post Reply