Hello! Baby Just Trying #1 is due this summer. DH and I are trying to decide on the vehicle in which to save for the little one's college. I'd love your help in making this decision.
Here are some facts about us to help you guide us:
Current Annual Pre-Tax Income: ~$110,000 (DH is self-employed and I'll be taking maternity leave which is why this is not a solid number).
State of Residence: Washington State (so there is no state tax benefit to us doing 529)
Current Savings Rate: Likely to be ~$40,000 into retirement this year. Likely to increase in years to come. In addition to this we overpay on our mortgage and I'm building up our emergency fund in anticipation of the baby from 3 months of expenses to 6 months of expenses. (We are obviously not truly mustachian!)
Amount Per Year We Plan to Save for College: $2,000-$2,400
Our Ages when Baby Goes to College: Early 50s.
Our Intended Financial Plans when Baby Goes to College: We plan to be living off investments.
Plans for other children: Maybe 1 more or 0 more. Definitely not 2+ more, unless we end up with twins, which is not super likely.
I was thinking about doing a Coverdell ESA since we have no tax advantages to using a 529, and we have more options of where to invest if we do an ESA vs a 529. However, from my understanding, an ESA must be used by someone under the age of 30. I really like learning, so if we don't have another child and my child chooses not to attend college, I'd like to use the $$ to learn something new and fun myself. It seems that if I might end up being the beneficiary of the account, I'd need to save in either a 529 or a non-college specific investment account.
Also, since I live in a state with no income tax, I can choose any state's 529 plan, so many many options are available!
So mustachians, what advice do you have? If you were in my situation, where would you choose to put your child's college savings?
Thanks!