Too much $$$ in a 529 plan???
So i am starting to wonder if there is a thing of having too much in a 529 plan. Any thoughts on a number?
i have two kids and i have socked away already 90k for one who will go to college in 4.5 years. The other childs account has 60k in it and has 8.5 years until college. Is this going to be too much? Final numbers by college age look to be about $125k and 140k unless everything falls apart.
But lets say they go to a state school or get a partial scholarship? Leaving a large dollar amount in the fund. Could i hold that account for my childrens children?
Re: Too much $$$ in a 529 plan???
Quote:
Originally Posted by
rktect1
So i am starting to wonder if there is a thing of having too much in a 529 plan. Any thoughts on a number?
i have two kids and i have socked away already 90k for one who will go to college in 4.5 years. The other childs account has 60k in it and has 8.5 years until college. Is this going to be too much? Final numbers by college age look to be about $125k and 140k unless everything falls apart.
But lets say they go to a state school or get a partial scholarship? Leaving a large dollar amount in the fund. Could i hold that account for my childrens children?
Good job in planning for their education. It all really depends on your children and where they go to college. If one doesn't need as much as set aside or decides not to go to school, the money can be transferred to another family member. See Chapter 8 of IRS Publication 970 on Qualified Tuition Plans (QTP) https://www.irs.gov/pub/irs-pdf/p970.pdf The section on Rollovers indicate eligible family members.
Re: Too much $$$ in a 529 plan???
well in about 4 years you can adopt my kid if you want...
Re: Too much $$$ in a 529 plan???
If the money is not used for college expenses by a relative, when the money is taken out of the account then taxs must be paid on gains PLUS a 10% penalty.
Re: Too much $$$ in a 529 plan???
Quote:
Originally Posted by
McDuck
If the money is not used for college expenses by a relative, when the money is taken out of the account then taxs must be paid on gains PLUS a 10% penalty.
How will they decide which portion was "gains" The gains are what I want to spend on college first. If anything is leftover, that was my initial investment.
It has been about 9 months since I originally posted this and their accounts now have $104k and $70k I would say that its been a good nine months for certain. I moved the $104k out of Upromise and into Vanguard 529 plan and its now in a medium/low growth fund. Just need 5% plus my contributions and he will have about $140K when he starts school. I have eight more years to grow the $70k into $140k which seems doable to me unless the economy collapses like 2008
Re: Too much $$$ in a 529 plan???
That is awesome. I researching it for my grandkids, 4 and 1 years old.
Re: Too much $$$ in a 529 plan???
Quote:
Originally Posted by
McDuck
That is awesome. I researching it for my grandkids, 4 and 1 years old.
I started these basically once I had their social security numbers. $300 per month religiously.
Re: Too much $$$ in a 529 plan???
Quote:
Originally Posted by
McDuck
That is awesome. I researching it for my grandkids, 4 and 1 years old.
We are looking into it also. A 3 year old, almost 4 and two more on the way.
Re: Too much $$$ in a 529 plan???
Quote:
Originally Posted by
rktect1
I started these basically once I had their social security numbers. $300 per month religiously.
A great investment.
Re: Too much $$$ in a 529 plan???
Which state's 529 are you in? Your own state or another's?
You've done very well IMO. If you don't spend it all for your kids, then yes I do believe you can use the remaining money for a family member's (grandkids) education in the future. When your own kids are done, perhaps you can reduce your monthly contribution and let the funds work on increasing the balance for grandkids since you will have many years for it to grow. If you can afford it, just contribute the same amount. What a great position to be in to create this generational wealth and benefit your family tree!
Re: Too much $$$ in a 529 plan???
Quote:
Originally Posted by
rktect1
I started these basically once I had their social security numbers. $300 per month religiously.
Hi rktect1,
I am also curious about this ... if you can answer my 2 Qs ... it can Help me in my endeavor ...
Q1: Which State Plan are you using? Or do you use Outside 529 plan ... like Vanguard, Fidelity or etc?
Q2: If it is State 529 Plan ... what Option / Plan are you using?
Thanks in advance! :smile:
Re: Too much $$$ in a 529 plan???
We have a 529 for each of our granddaughters that were started at ages 5, 3, and 1. Been a wonderful investment to help with their future education expenses. They’re invested in American Funds. We’ve invested $100.00 per month per account for well over 10 years. My son almost fell out when he saw how much they had amassed.