How much are you contributing to a 529 plan? Or what are you doing instead?

[WorkingToUnwind]

How many kids do you have, what are their ages, and how much are you contributing to a 529 plan(s)? Did you front load? How much would you like to have when your child(ren) goes off to college? Why that amount?

OR, why are you against them and what savings strategy are you using instead?

Trying to figure out how much to contribute for our two kids, 3 and 1.5yo. Have about 75k in two 529 plans so far.

[secondcor521]

I have three kids, age 28, 23, and 21.

I'm no longer contributing to their 529s because my kids are mostly done with college now.  One graduated and working, one a senior on full scholarship, and one taking an indefinite leave to start a business which is doing well.

We contributed sort of an arbitrary amount when starting.  I eventually contributed as much as I could for a while.
 I aimed to have four years of tuition, room, board, books, fees, and transportation for a four year public university per the College Board cost of college report.  Once I got to that point in their early teens, I slowed down and just monitored things.

That amount was arbitrary but I figured I needed a target to keep myself sane.  I FIREd while my kids were in high school and college.  The deal I made with myself was that I would see how things turned out, and if I needed more money for their college I would supplement from my FIRE stash or go back to work.  Things turned out fine and I have, in aggregate, somewhat overfunded their 529s.

Seeing how it worked for my kids, the 529s worked out very very well.  Now with the ability to do 529->Roth rollovers (new law starting 2024), and with the scholarship and service academy exceptions, I think there are reasonable options for slightly overfunding 529s.

I personally don't think any other savings strategy works better *if* one has a good state tax benefit.  Without the state tax benefit, maybe a regular taxable account is a competitive alternative.  The only minor drawback to my 529 experience is that the expense ratios of the 529 are a bit higher than what I cold have done in a taxable account.  That will vary by state, and in my case the state tax benefit more than offset the fees.

If the timing had been such that I would have still been working while my kids were in college, then I probably would have underfunded a bit and cash flowed some of it.  There will always be the inherent problem of trying to drain it exactly to zero as the last kid gets their diploma.  But again, the 529->Roth rollover option now makes that less of an issue.

I did also use the AOTC for each of my three kids.  One can either pay $4K OOP each year for this credit, or take it from the 529 but make the withdrawal taxable.  See IRS Pub 970 chapter on QTPs for details.

Note that there are some college expenses which are not 529 qualified; I generally paid these out of pocket.  Things I remember in this category are the travel costs associated with college visits, college application fees, SAT fees, AP/CLEP fees, and transport to/from college if they go away to school.  Not a large amount in the big scheme of things, but if you want to super plan then those would be things to note.

I was also able to buy several new computers and peripherals while they were in school because those are qualified expenses for 529 purposes if you meet the criteria.

I did make several nonqualified distributions when my kids were in college because I wanted to drain the 529s and was overfunded at that point and the taxes on their returns weren't too bad because they were low income.  In retrospect that was probably a mistake.  I think if I did it over again I would limit my 529 withdrawals to qualified expenses only.  Those would include 529->Roth rollovers, rolling it down to younger siblings or cousins, using them for graduate school, or keeping them as an educational trust fund for the grandkids if those ever appear.

[YttriumNitrate]

My state has a 20% tax credit (not a measly deduction) on the first $7,500 contributed to their 529 plan each year (previously $5,000 a year). I've been contributing each year to max out the credit. My kids are 5 and 8, and there's about $100k (combined) in their 529 plans.

[Trifle]

Our kids are now 20 (freshman in college) and 17 (senior in high school).  We opened 529 plans for them when they were 3 or 4 years old, with the goal of saving $100k for each kid -- approximately the cost of a four year in-state university.   We contributed $3000 - $5000 a year per kid until they were approximately in their early teens.  For most of that time we were living in a state that gave us a tax break for the contributions.   I judged when to throttle back based on savings calculators that predicted what the balance would be when they started college.  At the time there was no option to roll over excess 529 money into a Roth, so I felt leery of over-funding.

We FIREd when our kids were 12 and 15. For our oldest we nailed the college savings -- her 529 account balance was almost exactly $100k when she started college this month.  We recently made our first payment out of the 529 to her university and it was very easy and convenient.   

For our younger kid it looks like we'll be a little short -- his balance will probably be about $96k when he starts, if he goes to college right after he graduates high school.  We can make up that shortfall out of other savings so it's not a big deal.   

I've been really pleased with the 529 plans.  I'd do it again, and with the Roth roll-over option I'd be more aggressive with the deposits. 

[Louise]

I opened a 529 plan for my child when she was just a couple days old. My spouse thought I was nuts and thinking too far ahead, but now my kid is in HS and I'm glad we did. I opened the account with a lump sum of $11K (what we had sitting in a savings account). We've contributed anywhere from $50-100/mo over the last 14 years and now there's about $64K in it. We only have one child, so we didn't want to overfund it. However, now that we can move some of the money into a Roth for our child, I might have saved a bit more.

We also have $23K of I bonds we can use for college if we need to though.

[reeshau]

I have an 8 year old.  We contributed the state max deduction starting at year zero (birth year) up through year 4.  That $50k is now about $75k, on it's way to ~$125k, as the equity position glides down in time for college.  (Age-based plan, at least for now)

Hopefully, this about covers things.  I have called it "The Price Is Right" strategy, trying to come close to covering in-state tuition without going over.  Now that a Roth rollovers,lover is possible, I will definitely leave the last $35k alone to max that out.  (Contribution limits and earned income requirement still apply, so this will really be some kind of multi-year off ramp)  I have not yet decided if I want to contribute more to the account to try and accomplish both.

[WorkingToUnwind]

Without the state tax benefit, maybe a regular taxable account is a competitive alternative.

First off, thanks so much for your response. Lots of food for thought there. One question immediately popped into my mind. Why would a taxable account be a competitive alternative? I get the ERs are better, but you have to pay taxes on all the earnings, correct? Our state only gives a 2k income tax deduction per year.

[tooqk4u22]

Without the state tax benefit, maybe a regular taxable account is a competitive alternative.

First off, thanks so much for your response. Lots of food for thought there. One question immediately popped into my mind. Why would a taxable account be a competitive alternative? I get the ERs are better, but you have to pay taxes on all the earnings, correct? Our state only gives a 2k income tax deduction per year.

My state gives nothing but we still have one for each kid.  Wish we would have started when they were born but didn't, but we superfunded each account a few years ago and still have meaningful gains that will be tax free. But to hedge for not overfunding we also have fund in taxable accounts as well for flexibility.

Just like investing for yourself do the same with 529s....start early and often!

[ender]

MN's benefit sucks - you can deduct $3k off your income taxes (so about $300/year).

It's mostly crappy because you only can deduct $3k per couple.

So I'm torn on whether it's worth it vs taxable.

[secondcor521]

Without the state tax benefit, maybe a regular taxable account is a competitive alternative.

First off, thanks so much for your response. Lots of food for thought there. One question immediately popped into my mind. Why would a taxable account be a competitive alternative? I get the ERs are better, but you have to pay taxes on all the earnings, correct? Our state only gives a 2k income tax deduction per year.

Well, it depends on what people value, and that varies from person to person.

Taxable accounts have lower ERs.  You have more flexibility on what to invest in, which may be important.  If you invest in stocks or index funds, capital gains taxes only happen when and to the extent you sell, and are at lower rates.

But the biggest draw to a taxable account and it's chief strategic advantage over 529s is the fact that 529s are restricted to college and taxable accounts can be used for anything.  That flexibility as the answer to questions like "What if my kid doesn't go to college?" or "What if college is free in 15 years?" or "What if college is an outmoded idea in 15 years?" or "What if we need the money for our own needs?" could be important enough to outweigh the strictly financial advantages which a 529 has.

Again, that's not the case for me personally - 529s worked great and overfunding is not much of an issue anymore for me, and I got the state tax deduction and didn't care much about flexibility because I was going to brainwash my kids into going to college and the other hypotheticals mentioned in the previous paragraph didn't turn out to be the case for me.  But for someone who didn't get the state tax deduction and valued flexibility more than raw financial considerations, I can appreciate the point of view.

[YttriumNitrate]

Seeing how it worked for my kids, the 529s worked out very very well.  Now with the ability to do 529->Roth rollovers (new law starting 2024), and with the scholarship and service academy exceptions, I think there are reasonable options for slightly overfunding 529s.

Since my kids are 5 and 8, this year (and probably for a for more years in the future) I've been saving in accounts listing my wife and I as the beneficiaries. If the kids need the money for school, we can transfer the funds into their accounts without penalty, and if there is an excess we have more flexibility in doing the 529 to Roth conversion. I believe the accounts have to be open for 15 years before the conversion can be done, so the timing should work out well for when my kids are finishing college.

[reeshau]

Seeing how it worked for my kids, the 529s worked out very very well.  Now with the ability to do 529->Roth rollovers (new law starting 2024), and with the scholarship and service academy exceptions, I think there are reasonable options for slightly overfunding 529s.

Since my kids are 5 and 8, this year (and probably for a for more years in the future) I've been saving in accounts listing my wife and I as the beneficiaries. If the kids need the money for school, we can transfer the funds into their accounts without penalty, and if there is an excess we have more flexibility in doing the 529 to Roth conversion. I believe the accounts have to be open for 15 years before the conversion can be done, so the timing should work out well for when my kids are finishing college.

Is there a specific benefit to not naming your kids as beneficiaries?  They won't own a 529 when they turn 18, like they would with an UTMA.  Also, beware that there has been no regulatory test for whether a new beneficiary would inherit the seasoning of the account.  For example, Fidelity's description of the new rules says:

"Starting in 2024, you'll be able to convert tax- and penalty-free up to a lifetime limit $35,000 in a 529 to a Roth IRA owned by the 529 beneficiary for at least 15 years."

The FI Guy says:

"Does changing the beneficiary on a 529 reset the 15 year clock?

My hope is that the IRS and Treasury allow a successor beneficiary to inherit the holding period the original beneficiary had."

This is in context of changing a 529 back to the parent as beneficiary, just to harvest the Roth rollover opportunity.  But if someone owning it without exercising it for educational expenses is ruled a disqualification, that could apply before or after.  Who knows?  Unless there is a specific benefit, it's probably better not to tempt fate.

[MaybeBabyMustache]

My kids are 16 & 17. One is in the process of applying to college right now, the other will be applying next year. (senior & junior in high school)

We've saved around $90k/kid. We thought they would end up at California colleges, but that seems unlikely for both, given the competitiveness of even the lowest bracket UCs. CalStates are options, but many are "impacted", e.g. not accepting students for all majors. As a result, we probably underfunded, as we will likely be paying out of state tuition for other public universities. However, if one of the kids ends up at a California college, we should be in good shape & can move money between the kids. Because of their age, we will have at least 3 years with both of them in college at the same time. Our plan is to fund the first year each with 529s, spend them down to zero, and then cash flow. I was going to FIRE this month, but have put that on hold until we have a better sense of college costs. We can afford regardless, and have a very, very large cash buffer. (We're expecting them to get zero financial aid.) We'd prefer to use the cash buffer on other things, but can cover college out of pocket as needed.

[YttriumNitrate]

Is there a specific benefit to not naming your kids as beneficiaries?  They won't own a 529 when they turn 18, like they would with an UTMA.  Also, beware that there has been no regulatory test for whether a new beneficiary would inherit the seasoning of the account.  For example, Fidelity's description of the new rules says:
"Starting in 2024, you'll be able to convert tax- and penalty-free up to a lifetime limit $35,000 in a 529 to a Roth IRA owned by the 529 beneficiary for at least 15 years."

The main benefit of naming my wife and myself as beneficiaries on some of the accounts is that in 15 years (when my youngest is still in college) we'll have four fully seasoned 529 accounts rather than just two for the kids. That will hopefully give us more options in case there is an excess of funds in the accounts.

[reeshau]

Is there a specific benefit to not naming your kids as beneficiaries?  They won't own a 529 when they turn 18, like they would with an UTMA.  Also, beware that there has been no regulatory test for whether a new beneficiary would inherit the seasoning of the account.  For example, Fidelity's description of the new rules says:
"Starting in 2024, you'll be able to convert tax- and penalty-free up to a lifetime limit $35,000 in a 529 to a Roth IRA owned by the 529 beneficiary for at least 15 years."

The main benefit of naming my wife and myself as beneficiaries on some of the accounts is that in 15 years (when my youngest is still in college) we'll have four fully seasoned 529 accounts rather than just two for the kids. That will hopefully give us more options in case there is an excess of funds in the accounts.

Maybe you have some educational goals foe yourself, but take heed of this, further into the FI Tax Guy article:

"But if the middle-age owner becomes the beneficiary, the 529 is no longer for the beneficiary to use for qualified educational expenses. At that point, it appears that there is a high risk the account may cease to be a good 529."

He wrote this in the context of changing a beneficiary from a child to yourself--ostensibly, to make Roth contributions.  But the issue about whether the account is bona fide or not for the beneficiary's education could become a tax issue for you.

[secondcor521]

^ Interesting.  The FI guy seems to have very good credentials, but his comments are at odds with the text of the 529 law itself and most other opinions I have read.

A parent using a 529 for themselves is perfectly legal.  I'm 54 and have thought about going to law school and would have no concerns about changing my kids' 529s back to me to use for that purpose.  Most people I've seen agree with me on this point.

The question about if changing a 529 account beneficiary with respect to the 529->Roth rollover is unclear at this point.  The language of the law sometimes refers to "account" and sometimes to "beneficiary", and 529s already set up did not contemplate this new law.  I'd be conservative until guidance from the IRS comes out.

Obviously 529 withdrawals for qualified educational expenses will always need to be for the expenses of the current beneficiary.

[reeshau]

I think his concern is if you moved yourself to beneficiary just to then move to a Roth, with no demonstrated educational spending.

Yew, clearly you can use the 529 on your own education.  And, if it's an eligible institution, you don't even have to achieve a degree.

And, by the way, there are plenty of overseas institutions.

[secondcor521]

I think his concern is if you moved yourself to beneficiary just to then move to a Roth, with no demonstrated educational spending.

Right, that's what he says.  His concern has no basis in the law, though.

The law nowhere says "You have to spend some of the 529 money on education before doing the Roth rollover".  There are a lot of other rules about 529s, including a bunch about 529->Roth rollovers, but that's not one of them.

Tax laws are complicated enough after Congress is done with them without random people adding their own made up rules based on nothing other than their feelings and opinions.

AFAIK and IMNSHO.

[YttriumNitrate]

"But if the middle-age owner becomes the beneficiary, the 529 is no longer for the beneficiary to use for qualified educational expenses. At that point, it appears that there is a high risk the account may cease to be a good 529."

I would also point out that using his logic that would stop the practice of opening up a 529 before your child is born, naming yourself as the beneficiary, and then transferring the account over once the child is born. Until the child is born, the "middle-age owner [is] the beneficiary, the 529 is [not] for the beneficiary to use for qualified educational expenses" and would therefore not be a "good 529" under his interpretation. I didn't find anything from the IRS explicitly blessing this practice, but at least a few states' appear to do so.

[Bartlebooth]

Undecided at the moment.  Have a 1-year-old and plan to have four children eventually.  About $2k in a 529 currently.

We have a gross income of about $110k/year and are maxing 401k and HSA leaving $80k.  Roughly $70k after taxes, which is about what we spend (lax budget for sure).  Sort of leaving no money for a 529.

But there is a pile of high-risk investments that I am working on selling down, and hopefully doing that at a rate ($40k per year? - nearly zero cost basis) which keeps us under the IRA AGI limit of $110k.  So after sticking $13k of that in IRAs I should have about $27k of which plenty could go towards 529.

But, my state income taxes are pretty low and I have an exemption from them for 5 years.  So the only 529 benefit to me for a while is tax-free growth.

It seems like any money in a 529 (or any other non-retirement/residence asset) increases my EFC by roughly 5% (per each of the four years of college? and also per each of the four kids? so 80% EFC impact...).

After-tax 401(k) is an option with my plan.  But it also says no in-service withdrawals until normal retirement date of age 62 so gains there are taxed (deferred) until I RE (2029?) at which point I can finally roll them into a Roth IRA?  So the benefit of that route is the massive reduction of EFC-over-16-college-years of 80% of after-tax 401k contributions.  Maybe.  This is my first time getting so in depth on this planning.

[Captain FIRE]

6 yo: 216k
3 yo: 91k

We are frontloading to maximize the tax free benefit. (Only a small state tax break.) Originally aiming for 75% of a more expensive private school and planning to fund the remaining 25% from other savings or adjust as we got closer, but now it's less of an issue if we go over 100% with the Roth option. We also figure extra can go to grad costs or grandkids if needed. Other than 2k the year they were born, we've been maxing it out at $30k/year. We'll stop contributing to the 6 yo at the end of this year (and already ramped it down from the max to $1k/month).

We max out 401ks and anticipated no need based financial aid due to our income/assets.

Note: I'll edit this post for privacy later, so please don't quote directly.

[reeshau]

"But if the middle-age owner becomes the beneficiary, the 529 is no longer for the beneficiary to use for qualified educational expenses. At that point, it appears that there is a high risk the account may cease to be a good 529."

I would also point out that using his logic that would stop the practice of opening up a 529 before your child is born, naming yourself as the beneficiary, and then transferring the account over once the child is born. Until the child is born, the "middle-age owner [is] the beneficiary, the 529 is [not] for the beneficiary to use for qualified educational expenses" and would therefore not be a "good 529" under his interpretation. I didn't find anything from the IRS explicitly blessing this practice, but at least a few states' appear to do so.

I did go looking for primary source info, and could not find anything, either.  Of course, that part of his argument:  it's new, so there isn't much of anything.  But I think 529's themselves are old enough, that someone has done this already, and been noticed.

It still seems like extra work to me.  529 account limits are not small--why need 2 per kid?  But, whatever floats your boat.

[secondcor521]

It seems like any money in a 529 (or any other non-retirement/residence asset) increases my EFC by roughly 5% (per each of the four years of college? and also per each of the four kids? so 80% EFC impact...).

Yes, it would be per each of the four years.  Yes, it would be per each of the four kids.

Several points:

1.  Check your 5% number by going to the FAFSA EFC forecaster tool.  For a variety of complicated reasons, it will probably be less than 5%.  The FAFSA EFC forecaster tool will be your most accurate guide short of actually completing the real FAFSA.  Note, it will probably have it's name changed to the FAFSA SAI forecaster tool at some point soon.

2.  Assuming you use the 529s to pay for college, that 5% will be of a smaller and smaller number each passing year.

3.  The 80% you calculate, therefore, will probably be more like 50% or 60%, and that is only of your eldest child's first year of FAFSA college and only of your EFC.

4.  If you retire before your kids start college, or sometime in the process, it is pretty easy with research and a bit of planning to get a $0 or very very low (hundreds to a few thousand) EFC.

5.  Slightly different from #4 but related, if you can qualify for "exempt from asset reporting" then the 529 balances (and taxable account balances) will have zero effect on your FAFSA EFC.

Net net, the impact you're talking about might realistically be somewhere in the low hundreds of dollars, and could be as low as $0.

[roomtempmayo]

4.  If you retire before your kids start college, or sometime in the process, it is pretty easy with research and a bit of planning to get a $0 or very very low (hundreds to a few thousand) EFC.

You can, but it's also worth keeping in mind that many schools have abandoned need-blind admissions.  If you come in with a $0 EFC and you don't check a box for another institutional priority, that's going to have limiting effects on a prospective student's odds of admission.  This is more true in at private universities than state schools.

[secondcor521]

4.  If you retire before your kids start college, or sometime in the process, it is pretty easy with research and a bit of planning to get a $0 or very very low (hundreds to a few thousand) EFC.

You can, but it's also worth keeping in mind that many schools have abandoned need-blind admissions.  If you come in with a $0 EFC and you don't check a box for another institutional priority, that's going to have limiting effects on a prospective student's odds of admission.  This is more true in at private universities than state schools.

Indeed.  There are general strategies but sometimes specific schools dictate specific strategies.  One of my kids was an IB student.  Some schools didn't know what IB was; the school he ended up going to sought out IB students and gave them a bunch of perks including a free application, higher admission chances, and in his case a significant IB scholarship on top of the other scholarships and aid offered.

Considering specific "fit" between the applicant and school seemed to produce better outcomes in my experience.

Also, my comments are all from my perspective, and my youngest is a senior in college.  So newer or in-progress trends such as the reduction in needs-blind admissions won't be on my radar.

[WorkingToUnwind]

Woah, plenty of good insights and experiences here.

I think that I probably won't be working by the time the kids go to college and my husband definitely won't be. We'll be withdrawing from our brokerage account for money to live on, so I think our income will be low enough to have a 0% capital gains tax. In which case, it probably makes sense for us to just invest in our brokerage account rather than pour more money into the 529. The ER of my fidelity 529 is 0.11 whereas the ER of my brokerage is 0.04.

Any holes in my logic from those that have more experience with this?

[secondcor521]

Woah, plenty of good insights and experiences here.

I think that I probably won't be working by the time the kids go to college and my husband definitely won't be. We'll be withdrawing from our brokerage account for money to live on, so I think our income will be low enough to have a 0% capital gains tax. In which case, it probably makes sense for us to just invest in our brokerage account rather than pour more money into the 529. The ER of my fidelity 529 is 0.11 whereas the ER of my brokerage is 0.04.

Any holes in my logic from those that have more experience with this?

Any state tax benefit to 529 contributions?  If so that probably outweighs 7 basis points.

Any concern that the 0% rate won't be there when your kid goes to college?  Congress seems to have a hobby of changing tax laws.  (Of course, they could change 529 benefits for the worse as well, but I think that is less likely than the 0% rate going away.)

Also, even though it's 0% cap gains tax, that ignores state tax impacts based on AGI, which includes capital gains even those taxed at 0%.  It also ignores the AGI-related impacts on ACA subsidies, and even on eligibility for FAFSA benefits (which are roughly based on AGI).

Qualified 529 withdrawals don't even show up on anyone's tax return, so no AGI impact, no state tax impact, no ACA subsidy impact, no FAFSA benefit impact.

You might still choose to do taxable based on flexibility, as mentioned above.  But after-tax dollar wise for college expenses, 529 probably still wins.

[WorkingToUnwind]

Woah, plenty of good insights and experiences here.

I think that I probably won't be working by the time the kids go to college and my husband definitely won't be. We'll be withdrawing from our brokerage account for money to live on, so I think our income will be low enough to have a 0% capital gains tax. In which case, it probably makes sense for us to just invest in our brokerage account rather than pour more money into the 529. The ER of my fidelity 529 is 0.11 whereas the ER of my brokerage is 0.04.

Any holes in my logic from those that have more experience with this?

Any state tax benefit to 529 contributions?  If so that probably outweighs 7 basis points.

Any concern that the 0% rate won't be there when your kid goes to college?  Congress seems to have a hobby of changing tax laws.  (Of course, they could change 529 benefits for the worse as well, but I think that is less likely than the 0% rate going away.)

Also, even though it's 0% cap gains tax, that ignores state tax impacts based on AGI, which includes capital gains even those taxed at 0%.  It also ignores the AGI-related impacts on ACA subsidies, and even on eligibility for FAFSA benefits (which are roughly based on AGI).

Qualified 529 withdrawals don't even show up on anyone's tax return, so no AGI impact, no state tax impact, no ACA subsidy impact, no FAFSA benefit impact.

You might still choose to do taxable based on flexibility, as mentioned above.  But after-tax dollar wise for college expenses, 529 probably still wins.

Ohhhh very interesting! Good points. No state income tax where I live, but the other factors would affect us.

[Dee_the_third]

We are front loading. Goal is 50k per child by age 5, then it (in theory) has time to quadruple.

We’re probably going to end up overfunded, but I figure the odds are good that someone will want to go get a graduate degree and those add up fast. We can offset some of it and they can borrow the rest.

[WorkingToUnwind]

We are front loading. Goal is 50k per child by age 5, then it (in theory) has time to quadruple.

We’re probably going to end up overfunded, but I figure the odds are good that someone will want to go get a graduate degree and those add up fast. We can offset some of it and they can borrow the rest.

How would it quadruple? I thought it doubles every ten years you describe a time frame of 13 years.

[Dee_the_third]

We are front loading. Goal is 50k per child by age 5, then it (in theory) has time to quadruple.

We’re probably going to end up overfunded, but I figure the odds are good that someone will want to go get a graduate degree and those add up fast. We can offset some of it and they can borrow the rest.

How would it quadruple? I thought it doubles every ten years you describe a time frame of 13 years.

Oh yeah, that’s the old rule assuming 10% returns. I think folks mostly use 7% nowadays, which is 10 years like you say.

[moof]

Single 11 year old.  ~$60k in his 529 right now, planning on adding a little more over the next couple years, but maybe another 10-15k planned on the contribution front.
General target is 100-120k by time he hits college in 7 years (holy crap...).
State school here in Oregon has a ballpark cost of 30k/year, so if he has 80-100% of that covered, great.
Ballpark growth of the current balance at ~5-7%/year (post-inflation guesstimates) puts the balance at 84-96k at school start, hence the modest additional contributions to get us to the butter zone.

I currently have it in all stocks, but my intent is to taper that down soon.  The usual hand-wringing around the timing the tapering has ensued.

We have also just started the hand-wringing over when to pay off our mortgage to optimize.  Currently he will start college in 2030, mortgage payoff is presently 2031.  There is some value in possibly reducing our realized income for FAFSA purposes by paying it off a few years early.  First world problems for sure.

[la Condessa]

We have 5 kids and another on the way.  We put just enough into their 529 accounts each year to qualify for our state’s tax credit.  (This has varied based on our income.  Currently it means $3k total per year.)  We also put $100 per month per kid into individual savings accounts for them that earn 3% interest, and have Roth IRAs set up for the older four that they set aside half of all money they earn for.

We are of the skin-in-the-game philosophy—even with unlimited resources, we would not choose to give our kids a free ride.  We do want to help them, though.  Our goal is funds equivalent to tuition at our alma mater, plus an additional $12k each for other big life expenses that come in early adulthood.  It will be tight in the middle when we have three or four in college at the same time, but I think we will make it.


(Note: the school we went to does have unusually low tuition for its quality of education, so that only comes to $26k tuition per kid right now, though I expect it will be somewhat higher by the time my kids are in college.)