tcu2003
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Joined: Dec 31, 2010 15:24:01 GMT -5
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Post by tcu2003 on Nov 17, 2015 13:34:44 GMT -5
I opened a 529 when DS was maybe a year or 18 months (he's almost 3-1/2 now). At the time we were living in a state with no income tax and planned to move to a state that gave credits for contributions to a 529 plan in any state, so we chose the NY fund and are happy so far. We put in around $2k / year, but will increase this when we pay off our mortgage in the next couple of years. We also max our 401k accounts (one for each of us).
I feel somewhat confident that we will be able to make it all work when DS is old enough for college.
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wyouser
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Post by wyouser on Nov 17, 2015 13:48:09 GMT -5
For me, right after they came home from the hospital. (did the same for each of the grandkids) The earlier the better in my opinion.
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Deleted
Joined: Oct 7, 2024 6:25:44 GMT -5
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Post by Deleted on Nov 17, 2015 13:51:00 GMT -5
Our first child was born in 1969. That was about 14 years before 401k's/IRAs were commonly available at most companies. And about 26 years before the 529 Plan was created, and 28 years before Roth. So we invested in a common taxable brokerage account. We didn't 'compartmentalize', just built wealth for our 'future'. Later, when the tax deferred accounts became available we maxed a 401k, but all other money was still in the single brokerage account. When the kids went to college, we cash-flowed and/or sold stock. I had access to a 401(k) through my employer when DS was born in 1984 but, like you, never designated particular accounts for DS' college. I maxed out the 401(k) and saved whatever else I could in after-tax accounts.
Things never turn out according to plan, anyway. I ended up tapping the savings early because the public school system wasn't working for DS. In 1998, I shelled out $15K for his first year at NY Military Academy. I then cash-flowed his education from then on. My SIL was putting money aside in a Uniform Gifts to Minors account from day One and there was enough there to fund half his costs at a private university (with enough left for him to make a down payment on a modest house a couple of years after graduation). We'd moved to a LCOL area, which significantly increased what we were able to save, and DS' college costs were shared half by SIL's account and half by us. If SIL's contribution hadn't been there I would have encouraged DS to go to the nearby state university rather than take on loans.
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bookkeeper
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Post by bookkeeper on Nov 17, 2015 13:57:05 GMT -5
I started saving for the kids before they were born. I was wanting to take off 6 months with each child, so I needed a stash of money to replace my earnings.
After DS#1 was born, I had money taken from each paycheck and put into his savings account. All rebate checks and found money went into his savings account too. Later on, we opened a UGTMA account for him (529 account had not been invented yet). We kept on that way for him and his little brother until my husband finally opened a Roth IRA.
After DH opened his Roth IRA, we cleared out the kids accounts and dumped them into the Roth. My husband is 5 years older than me, so we chose his account, since we could access it sooner. We have not had to tap the Roth account yet, so something is working for us.
I kept saving. Most of my employment bonus money went either into CD's for future college expenses or to pay the tuition bill after they had started. I get some farm income from my parents and that too was spent on our son's educations as well as a used car to get to school. Now that DS#2 has graduated and DS#1 has only a year to finish, I spend that farm income paying down their federal student loan balance. DS#2 is on the hook for $360/month student loan payment, but hopefully I can help him pay it off in just a couple more years.
Both our sons took Stafford loans. I felt they had to have some skin in the game when it came to spending money on college.
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HoneyBBQ
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Post by HoneyBBQ on Nov 17, 2015 14:10:50 GMT -5
College costs? Did you follow the YM approved plan by maxing the retirement accounts first? How much did you put in on a regular? Or was it one time? Right away. Yes. Not regular. We saved some money in a 529 when we lived in a state where we could write it off. Since, we've earmarked money we had in a savings account that was for StepD's college and made it for DD since stepD is.... difficult and all that. I invested some more money in the WA GET 529 plan but that was a mistake as they actually lowered tuition this year and now are all confused about what to do. We have about ~100k set aside right now and I think we are done. We can cash flow anything else in the future if we need to.
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lurkyloo
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“Time means nothing now,” said Toad. “It is just the thing that happens between snacks.”
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Post by lurkyloo on Nov 17, 2015 18:21:52 GMT -5
We started putting 5K chunks in a 529 when DS was around a year, I think? 20K in there plus earnings right now. We're eyeing the MD prepaid tuition plan; 42K now (= 5K state tax deductions for the next 8 years) buys four years of tuition at in-state or an equivalent amount towards out of state or private in 16 years' time...just have to get off our asses and pull the trigger. That'd probably be it for worrying about college costs; figure we can cash-flow any overages when the time comes. I think tuition is generally rising faster and more predictably than the stock market* so I feel like it's a decent bet.
*Yes, I just blasphemed!
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