529 milestones for Junior

I used some online calculator from Schwab. $100k in 1st grade gets me to where it says I should be for my kid to go to an out of state public school.

Tough balance between saving enough and not saving too much.

Ours was to fund 529 at 90% of projected 4-year state university full cost (tuition, room, board, etc) for "junior's" college years, including college cost inflation, of course.

How it turned out:
"Junior 1" - carried with her 30 credit hours from high school and nice chunk of TOPS. Finished LSU in 3 years. The plan worked "ish", as we then took her remaining 529 balance and shifted to "Junior 2".Junior 2 now plays college football. So, not fully needed.

I share to say that under-funding was our plan as optionality (if instead overfunded) was important. This was before could roll into Roth IRAs. Underfunding worked for us "ish". Aim lower than you think but have another fund that you can lean on if you need it for college. If not, then not. Again, optionality for the final bits.

You are already winning most of the war by the post and action to start funding early! Well done.

In summary, have an outcome goal at Junior's college time and work the PV back to answer your question. Factor in risk on both sides of the target (if there is a Junior 2).

Good luck!

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milestones for Junior

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I just got junior fitted for his second set of irons

He turns 6 this fall. His drive already has a textbook finish. Completely balanced over his lead leg. He’s got effortless speed and great hand eye coordination genetically.

I asked my FA if I have enough in my accounts.

He said he has one client that has a goal of $750K for education savings and are about halfway there. Both parents are surgeons and the kid is smart as hell. They want to send him to Duke/UNC or some other medical prestige school. Supposedly that is the cost of college/med school of that caliber.

Wow.

I have suddenly become more worried about not having enough in a K12 account than a 529. I have about $35K in two kids K12 accounts who will be in HS in 3-4 years. I am paying cash for tuition but in case life changes tomorrow I need at least $100K to keep them in private school until they graduate.

For the 529, you can heavily fund the first kid and lightly fund the 2nd and 3rd kid, then if there is any money left after the 1st graduates, you can send it down to the 2nd kid and so on.

I'm on a good track with the 1st two kids, with each of them having over $150K in the 529. Still I am worried with the rising cost of education. My grad school's education, for example, has more than doubled since I was there.

I am assuming to send your kid to undergrad/grad/law/medical school, you need at least $300K if you don't want them to have loans.

Yes there is the likelihood of scholarships, but I believe that when its granted to my kid. Otherwise it feels like a reliance on the government, and I know how that could end up.

All four of my kids will do the Juco —> 4yr pathway if athletics don’t cover 70%.

Helps that we have a great juco nearby.

I want them to have a little skin in the game. I'm saving but not a ton a month. $275 for my oldest, about 42k in that account. Will probably grow to about 60-70 by the time they start their freshman year.

My other two, started them earlier with $150 a month. About 25k in those.

I got exactly $0 from my parents so it's important they get something. Going to college broke completely sucks.

They can go where they want but if they want to go somewhere crazy on cost, they can finance that if that's what they want.

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I used some online calculator from Schwab. $100k in 1st grade gets me to where it says I should be for my kid to go to an out of state public school.

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this has to be trolling

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I’m not paying for my kids to go to an expensive college. Plenty of quality state schools with good educations if choosing the right degree. And scholarships are much easier to come by

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The even larger question, with how things are trending, will college degrees even be a real thing in 10-15yrs

If you have a loaded 529 and your kid decides to get a few certifications and thats it, what happens to the rest of the funds? Assuming pay a huge penalty to pull?

Found my own answer. So its a crap shoot at this point w/ the way college/education is trending and becoming more obsolete with anything over 35k due to 10% withdraw penalty. Although I guess you could play the shell game and move to other relatives then move up to the 35k into their Roth.

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If a 529 plan beneficiary does not go to college, the funds are not lost. Options include transferring the account to a family member, paying for trade/technical schools, using up to $10,000 for student loans, or rolling over up to $35,000 into a Roth IRA for the beneficiary, subject to specific rules.

Top Options for Unused 529 FundsChange the Beneficiary:

You can change the beneficiary to a sibling, cousin, parent, or yourself (anyone defined as a family member by the IRS) without tax consequences.

Roll Over to a Roth IRA: Under the SECURE 2.0 Act, you can move up to a lifetime limit of $35,000 to the beneficiary's Roth IRA. Conditions include: the account must be open for 15+ years, funds must be there for 5+ years, and it must fit within annual contribution limits.

Use for Vocational/Trade Schools: Funds can be used tax-free at any accredited school, including vocational schools, technical institutes, and registered apprenticeship programs.Pay Down Student Loans:

You can withdraw up to a lifetime maximum of $10,000 per beneficiary to pay down student loans.

Keep it for the Future: 529 plans have no age limit or expiration date.

You can leave the money in the account for future educational needs, such as master's programs or professional certifications.

Non-Qualified Withdrawal: You can withdraw the money for non-educational purposes, but you will pay ordinary income tax plus a 10% penalty on the earnings portion of the withdrawal. Contributions (which are made with post-tax money) are never penalized.

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