How much should I contribute monthly to a 529 for my future child?

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  • #112306 Reply
    Irene

      Having a baby next month (my first / only?) and wondering how much to contribute to a 529? Googling “how much will college cost in 18 years?”

      has my head spinning and obviously it can vary widely depending on whether it’s a public or private school, etc. so curious what others are contributing each month/year.

      Whatever “extra” money I don’t add to the 529 will go in a brokerage account instead since I already max out retirement accounts.

      I’m 37 and ”on track” for retirement investments according to the benchmarks of “1x salary by 30, 3x by 40, etc.”

      #112307 Reply
      Brian

        Married couple here… single and only child, no plans for more. We set a goal of 50K invested in 529 by age 2 and we hit that. Good incomes.

        We’ll likely continue to fund to try to cover potential grad school as an option.

        We don’t want to bank on scholarships and want the options for both private and out of state.

        #112308 Reply
        Karen

          As a parent who just went through the college process with my oldest, I would say that YES it costs that much.

          If I was a new parent again and had the means to do so, I would target to save for at least the cost of a public school.

          My oldest is at a small liberal arts college that, after scholarships and grants, costs about the same as the sticker price for our flagship state school.

          That flagship state school is known to not give much financial aid, so essentially we are paying the same for a private school as we would for public.

          #112309 Reply
          Erica

            So, you’ve kind of already answered your question: put in whatever you decide fits your goals/budget.

            Whatever you decide, don’t sacrifice your retirement or current opportunities and experiences with your child.

            We have a very tight budget, so our kids each received a few thousand towards their future education (one did not choose college and used the money for training).

            #112310 Reply
            Negrita

              I would put in what your budget allows.
              DO NOT sacrifice investing in retirement for angels’ schooling.
              We have to put our masks on first.

              I didn’t and now I have to catch up and work til I’m maybe 80 so I’m not a financial burden on my 3.

              Also. I know this is WAY ahead but when they get older speak to your angels about your financial contributions towards their schooling.

              When they’re maybe freshmen in HS. Or even in middle school!! If they know their budget then they can plan accordingly.

              They can work PT to save if needed. Go to community college. Commute. Cash flow.

              Best of luck!!

              #112311 Reply
              Bill

                So, it doesn’t sound like you are in a position to contribute anything right now. The 3x by 40 assumes you work until 67 and get SS to cover about half your expenses.

                Focus on maxing out your retirement savings first and get yourself in a position of financial strength.

                #112312 Reply
                Maarit

                  We chose to contribute nothing to 529 since our state does not give any tax breaks for those accounts.

                  #112313 Reply
                  Suzanne

                    Depends on budget. My oldest is a college freshman… our goal was to cover cost at our flagship state public school for 4 years. She got scholarships, so we actually oversaved.

                    However, you can pull excess $$ out up to the amount of the scholarship penalty free (not tax free though…

                    however if you pull it out in the students name and funds go to them, it’s taxable at their tax rate).

                    And up to a certain amount, you can use any excess funds to contribute to the beneficiaries Roth IRA (and you can change the account beneficiary).

                    #112314 Reply
                    Noa

                      My approach is… The more you save, the more they’ll spend. We are thinking of maybe having 100k set aside per kid to cover supporting them into early adulthood (college, downpayment, wedding), but will not tell them.

                      Hopefully they can figure out a cost effective way to do school…if college is still a big deal then, which I’m not sure of…

                      #112315 Reply
                      Sarah

                        My experiences with 529s have been underwhelming. So, I would save for college and other things in a brokerage account.

                        That’s my opinion.

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