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Parents: How much do you contribute annually to a 529 account? What is your target balance when your child graduates high school?

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I have a $250/month direct deposit going into my child’s 529 and then add a one time deposit of $2500 at the end of each year. I started 15 years ago when he was born (I opened the account a few days after his birth). The account currently has $139K in it and the goal is to get to $150K. I’m assuming that his college tuition and living expenses will total close to $200K - $250K and will cover some of the difference through other investment vehicles. I’m also expecting him to get a job and contribute some as I am not going to raise an entitled child. For the past five years, I’ve also been gifting him stocks as his birthday present and that has also built up equity too.

likehelpfulupliftingsmart

P1, you are an amazing parent. Hoping I can do the same for my future kid!

Has anyone thought about making them take out some loans with the promise of repaying it in full upon graduation? Obviously still saving as if you’re going to pay for the full thing but withholding payment until they prove they’re serious... I struggle because I believe college in its current context is insanely broken and kids/parents need to weigh the cost/benefit of attending and degree selection. We currently use Fidelity and use the Fidelity Rewards credit cards which deposits 2% cash back directly in to Fidelity accounts. We use it to supplement our 529 contributions and is proving to be a nice mindless way to build the savings.

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Parents paid for my tuition and fees per semester with the following requirements - 1. Maintain 3.0+ GPA 2. Part time work in service industry - keep them humble 3. Do an extracurricular (club, sports, whatever) and develop informal leadership/brand 4. Study Abroad fees outside tuition/flights paid for by me 5. Apply for scholarship if applicable

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High school senior here, over her life it started small $300/ month now it’s well-over 2K a month, has averaged over her life about $1,600 / month. Balance in the thing is about $220, looks like it will cover slightly over 1/2 as just got accepted to Yale

likefunny

No it’s about 72K a year all in, NYU is 98

Opened up in my name before first child was born. Contributed ~$10K / year for 3 years prior to birth and am continuing to do so now until with ~4% annual returns (fairly conservative, I believe) compounded it covers ~$200K+. If possible, intend to open another 529 for our next child before it’s born. More time = more compounding = less stress.

likesmart

1. $500/mo in 529 2. $500/mo in a brokerage account under their names 3. Will make them have little skin in the game but contributing what they can Goal is to not take out any loans.

likesmarthelpful

This is a deeply personal Q. I personally would like to cover half my kids tuition. I did a tuition calculator which said something like 160k for my toddler. So knowing I need 80k in 16 years, I’m contributing 200-250 a month. I also have UTMA accounts for them too.

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Agreed. I’ve only done the UGTM accounts for my kids. But will maybe only reach 1/4 or my kids tuition. Better than what I received ($0).

I did a UGTM account for my kids. I didn’t want as many distribution and investment constraints. That being said, I’ve been dropping around $100/month in each. Though, that fluctuates. For a while it was maybe $50/month, recently, it’s been closer to $200. Either way, you are doing the right thing. My parents didn’t have the money to send me to college, so I paid through military service.

likesmart

SM1 - same here.

I'm doing $150 per biweekly paycheck for my 3 year old, probably going to bump that up to $200 in the spring. I have no target balance, he'll just be able to use whatever the full amount is when he goes to college. If scholarships/grants don't cover the difference, I'll expect him to have some sort of job to at least cover some of the gap so he has skin in the game. Whatever his situation is then, I'll continue the tradition my parents had with my siblings and I, and pay off any outstanding student loans he might have at graduation. If we have another kid, same thing will apply to them.

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I started with $200 a month and have it auto increase 10% a year or so. Now up to $400 a month. Balance is $44k and kid is 10. Aiming to get to $120k or so then just pay the rest with other funds.

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$10k / year per kid.

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I’m not doing a 529 because it is very limited in how you can use the money. For example, if the kid gets a scholarship and you dont need it for tuition you’re kind of stuck paying high fees/taxes to use it for other purposes.

helpful

That’s not all true. If your kid gets a scholarship you can pull that same amount out of the 529 with no penalty. You may have to pay the taxes but there are no penalty fees.

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$0 no intention of paying for college for kids upfront. The cost of loan interest for them is worth the sweat it will cause. Maybe post graduation when job secured and doing well I would pay off loans. I don’t understand why anyone would pay for kids college upfront.

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A3 - your partner should count their blessings. Their rent was paid. Sounds like a good deal to me. They could have joined the service like many others do. College would have been a gift, sounds like your partner felt entitled to it by virtue of his/her parents wealth.

Opened the 529 a/c the month our child was born. For the first 5 years, we put in $200/month plus another ~$500/year for birthday and misc. For the last 3 years, we've put $100/month, plus ~$200/year. The plan is to go at the current pace. Account balance, as of right now, is $35k. We don't really have a target but should easily have $100k when college starts in a decade.

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$600 per kid per month, 3 kids. By 18 years or so, each should have enough to cover their tuition and fees at a decent state school (Univ of CA). If they choose private, then we have some other options like loans, liquidate some securities, or they get scholarship, or they work, etc.

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I have two kids - the first kid was around when Bitcoin skyrocketed to 20k and I did a one time contribution of 150k (or the 5-year max, whatever that was) by selling it all. My second child turned 1 this year and I put the same amount in hers based on frugal living/spending. Now, it feels I don’t have to worry about it for the rest of their lives. But I wonder if it’s still a vehicle to keep stuffing cash in, especially if I can use it for private school.

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I aim to max out the tax deduction - $5k

Is anyone doing a custodial IRA for their kids? Any value? Also with the UGTM account, only drawback is once they turn 18, that money is there’s. Technically it’s theirs once it’s in the account. Meaning if it’s a sizable amount and they may not be ready for it, legally, they’d still get the cash.

It’s such a great idea — guaranteed millionaires at retirement.

Did a one time drop of $30K into the state prepay system to cover 4 years of university and dorms. Still need some money for meal plan and books but thats peanuts comparatively

What if they don’t want to go to a state school?

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