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I’m putting $250/mo in for my new born. Goal is 100k in 18 years.
Who knows what college will be like in 18 years, but 100k will cover any state school for 4 years with basic scholarships
Total costs at all of these schools - even in-state - is already over $100k today, with the exception of Purdue, for which you’d have to live in Indiana (the definition of flyover country) to get in-state tuition. More importantly this is the cost NOW, not what it will be in 18 years, which I can promise you will be much higher.
My wife and I agreed early on to fund 529s aggressively while our children were quite young, with the goal being to save enough to pay in full if possible and leave them with no debt or out of pocket costs. I generally assumed that one might go in state, one might go out of state, and another might go private, but didn’t alter the amounts for any of them specifically.
Every year I ran the amounts through a college savings calculator or two to do projections. Around 7-8 years ago we stopped contributing to the 529s because the projections showed near full funding and we didn’t want to put too much into a vehicle with withdrawal penalties.
We are now halfway through our college costs and the projections and plans have worked out quite well. We have also taken advantage of strong growth (and a small scholarship) to use a small amount of the money to pay for some private school costs and to roll some over into Roth IRAs for children who had eligible earnings.
We recently also rolled some remaining funds from a graduating, lower-cost child’s account into the account for a higher-cost child so that we can use the tax-advantaged funds most efficiently. We have told our kids that college is on us but grad school is on them if they choose to go that route. That was a parental choice that not everyone may agree with.
Our decisions have been very conscious and were most certainly informed by how our own parents treated us years ago in our college days. We realize that others - even our own siblings - may make different choices, but we felt that this was most fair.
Like others who have commented, we have instilled the value of education and hard work on our kids. They have all had part time jobs working in retail while in high school, have had internships every single summer (even in the very competitive environment), and are self motivated to follow their own interests. We are also very transparent about the costs of their education and expect them to maintain good grades, which has not been an issue. Our oldest is graduating from college this coming week and already has a highly selective, well-paying job lined up in a city of his choosing. We are proud that our investment in education is paying off.
My kids won’t have student loans. Aggressively funded 529s in birth years via accelerated gifting. Should be more or less set
Each got 150k +/- in their birth year. 75% funded via annual bonuses, 25% via left over 529 funds my parents left me. With moderate growth the accounts should each be maxing themselves out by age 18 for each kid. Intent is to fully fund private undergrad as our parents did for us.
Philosophy, as in why would parents do it?
To give their kids a bit of a leg up in life, would be my hypothesis. My parents paid for my undergrad and I'm doing it for my kids.
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I plan to be able to pay for my children's college myself and expect to need to. My parents didn't pay for mine, but they were low income, which meant society (government, universities) helped me. I am high income, so my children will not get this kind of help. I don't want them to have to borrow large amounts.
I intend to fund this mainly with 529s if tax laws stay about the same. Large amounts of tax free growth are a desirable thing. Might as well harvest this valuable tax benefit.
My brother, brother-in-law, and several friends never went to college but are doing just fine. I want the flexibility to support my kids in whatever venture they choose, and college isn't always the answer. So I have separate brokerage accounts for them that I fund instead of the 529.
All fair points, I think it’s just a different parenting philosophy and style. I feel higher education will give children a much higher probability of having a successful career and hopefully be a positive contributor to society. And I believe my duty as a parent is to give them that opportunity to be the best they can be. After all, my wife and I chose to have kids, the kids didn’t have a choice to be in this world.
My parents were low middle income immigrants, they mortgaged their own future (gave up good career in the motherland) to come to the US and struggled financially to put 2 kids through college, I will do the same for my kids (luckily without the struggle). Both my wife and I have master’s degrees, my kids know going to college is not an option, it’s a minimum requirement.
My parents paid for mine and I fully believe that it has given me an advantage as home buying, FIRE, and ultimately setting my own family up for success. As such, I plan on funding my child’s future education as well. My mom didn’t go to college and always felt “left out” (she ended up doing just fine and earning +200k a year), but I want to make sure my kid isn’t deterred by cost. No one can take a degree away from you.
Don’t go crazy for kids if you’re still behind (or catching up) for yourself. Too many parents are putting thousands per year into a 529 for their preschooler and they’re barely maxing out a Roth. Save yourself first!!!
If you’re maxing a Roth, HSA, and are getting at least $20k into a 401k then by all means fund that 529. But if not then be super aggressive with your own retirement and once you’ve reached a “tipping point” in your own investments then be aggressive with the 529. It’s a great way to save for college etc and give your kids a head start. And you can always help them with college. Even after they enroll. They don’t need $100k saved by the time they’re in middle school
My goal was to fund around 50% and handle the rest from current income. The thought was that we would have a higher income when the time came. Paid for 100% of one of their medical school out of current income. Worked for us.
Not paying for my kids. We do have a plan to move to Europe where there are cheaper options. We plan not to work when they are in college but depending on school, our assets might disqualify them from financial aid. I paid for my own college and grad school and plan on my kids doing as much of it themselves. My college did grant me independent status due to my situation. My kids won’t have that privilege.
I started a little late on the 529, so I am contributing $2k a month for each kid now. My plan is to be able to cover at least 2 yrs of private school tuition from the 529, which should be plenty if my kids end up in public schools . I have also set aside a separate “education fund”, in case the 529 is not enough. If this separate fund is not used, I will use the money to help them buy an apartment/house.