I had $1000 in my son's 529 account before he was even born

...why are you having children; a major tell you’re caught up in hubris; should’ve had your balls snipped and lived a life free of all the bs ..be a contrarian not a follower.

Congrats on your start. We started saving for my son's college when he was born and he just started college in September of last year. The GET and 529 plan was able to fully fund his college costs for the 4 years by the time he started, at a private out of state college (one of the expensive ones in the news today for all the wrong reasons).

They (financial advisors) say to save for your retirement as a first priority but also the college funds if you can.

Best of luck and i think you have reason to feel a certain satisfaction in your prudent planning.

Thank You. It seems to be hard to find out how much to contribute to 529 online. There's plenty of websites about how much to contribute towards retirement funds but now 529.

try fidelity for college saving calculators.

i hate to break it to you though, $250 a month isn't enough.

i started at $500, and have been easing that up and now its $833 a month and that doesn't even cover everything.

i have $175k currently in his 529 and he is 14. i hope to be ok but it all depends on what school.

my niece just got accepted to BU and PACE and they are $50k a year all in. she will get financial aid though. my son alas won't....

try fidelity wrote:

try fidelity for college saving calculators.

i hate to break it to you though, $250 a month isn't enough.

i started at $500, and have been easing that up and now its $833 a month and that doesn't even cover everything.

i have $175k currently in his 529 and he is 14. i hope to be ok but it all depends on what school.

my niece just got accepted to BU and PACE and they are $50k a year all in. she will get financial aid though. my son alas won't....

175k for undergrad?? I went to UMass which was like 60k for 4 years. I'm doing the same or better financially as my friend who went to BU.

Also how does your kid get financial aid with 175k in a 529? My parents didn't have anything saved up for me and I didn't get anything for financial aid.

529s are treated the same as any parent asset I think. 5.4% of liquid assets are assumed to be available to pay college costs each year.

It seems doubtful that many would be in the situation (all assets in a 529) but I guess it could happen. Most with large 529s are going to have significant other assets though.

I personally don't get the militant level college saving. Do what you reasonably can do but putting $833/mo in a 529 seems crazy unless it's simply for the tax free growth benefit and you're well off such that $833 is no big deal. If you're eating spaghetti-os and every night and driving a 1985 car to save that much though... I'd rethink priorities. Every state has fine public colleges.

fgjvvcx wrote:

529s are treated the same as any parent asset I think. 5.4% of liquid assets are assumed to be available to pay college costs each year.

It seems doubtful that many would be in the situation (all assets in a 529) but I guess it could happen. Most with large 529s are going to have significant other assets though.

I personally don't get the militant level college saving. Do what you reasonably can do but putting $833/mo in a 529 seems crazy unless it's simply for the tax free growth benefit and you're well off such that $833 is no big deal. If you're eating spaghetti-os and every night and driving a 1985 car to save that much though... I'd rethink priorities. Every state has fine public colleges.

Seriously, the average American can't even save 10% in their 401k. How is everyone going to save $833/mo in 529? That's two car payments and almost a mortgage.

My son's 529 is invested in a 2036 target date fund. I looked at the holdings and it's about 1/3 bonds/cash, 1/3 international stocks, 1/3 US stocks. Does this seem too conservative? Would I be better off investing it in a total stock market or S&P fund?

investing noob wrote:

My son's 529 is invested in a 2036 target date fund. I looked at the holdings and it's about 1/3 bonds/cash, 1/3 international stocks, 1/3 US stocks. Does this seem too conservative? Would I be better off investing it in a total stock market or S&P fund?

Yes, too conservative for my liking.

I would do like you said,until he/she is about 5 years from starting college, and then move progressively more conservative thereafter.

seattle prattle wrote:

investing noob wrote:

My son's 529 is invested in a 2036 target date fund. I looked at the holdings and it's about 1/3 bonds/cash, 1/3 international stocks, 1/3 US stocks. Does this seem too conservative? Would I be better off investing it in a total stock market or S&P fund?

Yes, too conservative for my liking.

I would do like you said,until he/she is about 5 years from starting college, and then move progressively more conservative thereafter.

Thanks! His account is up 30% since 2018. Although that is great, my wife's Roth is up 40% since I moved her funds into an S&P in May 2020. I will be bumping up the 529 contributions to $1000/mo. Hopefully after 5 years, that'll be enough to compound until he's 18.

I put $150 in Dogecoin in 2015 for my son, and now it's paying for both my kids college. 529 is a joke

Your son is very lucky. Most of us not only didn’t get this kind of head start, we also didn’t have parents savvy enough to know about such financial instruments. As many posters are pointing out, this investment will only accrue to a few thousand dollars. However, the principle you are promoting is much more important. Congrats on being awesome.

This thread was built on a lie. First, middle and last name needed for any account at bank or brokerage house. Date of birth needed. SS# needed. Open up an account with $1000 or more before child is born? How?

this thread is built on a lie wrote:

This thread was built on a lie. First, middle and last name needed for any account at bank or brokerage house. Date of birth needed. SS# needed. Open up an account with $1000 or more before child is born? How?

529s are opened under the SS# of the parent and can be used (with penalty) by the parent or (without penalty on school expenses) by the designated beneficiary.

No problem opening a 529 and assigning a beneficiary later. If you don't have kids, you could assign it to someone else like a neice, or you could just take a penalty.

UsedToBeKnowItAll wrote:

H&R Block's calculator for a 19 year old that makes $20k wages, $4.5k in LTCG, and has $24.5k in education expenses is they will owe $0 in taxes, and get a $1000 refund because of tax credits.

There are two types of tax credits; refundable and non-refundable. You can only get a refund beyond what you owe in tax with refundable credits (child credits, health care assistance). With non-refundable credits you cannot get more back than what you paid. The American Opportunity Tax Credit (AOTC) for education expenses is a hybrid of these that allows a partial tax refund if you owe less than $0 in taxes. The AOTC has special rules (first four years of higher education) and limitations (40% of the expense up to a limit of $1000).

investing noob wrote:

seattle prattle wrote:

Yes, too conservative for my liking.

I would do like you said,until he/she is about 5 years from starting college, and then move progressively more conservative thereafter.

Thanks! His account is up 30% since 2018. Although that is great, my wife's Roth is up 40% since I moved her funds into an S&P in May 2020. I will be bumping up the 529 contributions to $1000/mo. Hopefully after 5 years, that'll be enough to compound until he's 18.

This is an involved topic.

As for your choice of investment options within the 529, you can look at it this way: if you have the resources to make up the difference should the investment underperform, then you can afford to be more aggressive with your selection. If, on the other hand, underperformance would lead you to hardship, you really wouldn't want to open yourself up to that possibility, and you would want to be a bit more conservative, even at the risk of missing out on a little potential gain/appreciation. Also, you can change the investment track up to one or two times per year for most plans if you find it is not working as expected.

You are within the contribution limits of the 529 at that level, so that's good.

And that will be a very solid start, with all the benefits of more than a few years in which it may accrue and compound.

College can be really expensive, depending on the school,. For a state school, in-state tuition, you would be right in line with covering the costs, if all goes well. Private might still leave room for out of pocket expenses or financial aid or a merit scholarship.

Do understand that when it comes time to apply for financial aid and scholarships, the colleges do look at your savings and income and 529 account assets and take that into account into their awards.

Lastly, as you probably know, the 529 can also be used for graduate school or another child's education, if your accumulated account holdings exceeds what it costs for your child's undergrad. education.

But as others have said, nice job planning ahead.

rojo togurt wrote:

Your son is very lucky. Most of us not only didn’t get this kind of head start, we also didn’t have parents savvy enough to know about such financial instruments. As many posters are pointing out, this investment will only accrue to a few thousand dollars. However, the principle you are promoting is much more important. Congrats on being awesome.

Thanks! We didn't get help like this from our parents either. Hopefully our son appreciates it.

this thread is built on a lie wrote:

This thread was built on a lie. First, middle and last name needed for any account at bank or brokerage house. Date of birth needed. SS# needed. Open up an account with $1000 or more before child is born? How?

Google is your friend and this is easy and very common. Open up a custodial account and change the beneficiary at any time.