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Old 08-21-2018, 11:20 AM   #61
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cut the cord. if the kid wants an education they can save and work enough for scholarship qualifying grades.
Private trade schools are starting to charge $60K for tuition for a 20K/year job... with near infinite loans available to their customers, they can charge near infinite prices. Soon there will be a "cash price" similar to uninsured medical care. Not going to play.
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Old 08-21-2018, 12:24 PM   #62
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I have one child (DS) entering junior year in high school. He had so-so grades, but has improved them considerably in tenth grade. I have about $90K in a 529 and another $45K in a UTMA/UGMA in his name.

I'm seriously considering telling him that he has $200K to pull from (the 529 + UTMA + other provided by me) for college, with the knowledge that unspent funds will still be his if not all used up for college.

The reality of the situation is that he will be getting the in the end anyway, and more (unless something catastrophic happens), but he doesn't know that.
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Old 08-21-2018, 12:52 PM   #63
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So far I’ve put aside about $65k for three grandkids, starting at $20k/kid when born. Plan to continue to add to their 529 plans.
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Old 08-21-2018, 02:37 PM   #64
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Our kids are now 29 and 26. One engineer, one teacher. They both went to state universities for 4 years. Total cost was $16K per year per kid with only one year of overlap. Total $128K spread over 7 years. We had no savings specifically earmarked for this. But we were both working and at peak earnings level so we just paid out of normal cashflow. We retired when the youngest was in her final year of college.

They each had PT/summer jobs and paid all their own misc living expenses, including bills once they moved off campus. We paid rent in lieu of R&B. We typically gave them laptops and cell phones as Christmas or birthday gifts and they each got a new car upon graduation with job offer.

They each had very minor scholarships, typically one-time $500 or $1000 mostly related to high school activities. DS had full-ride offers to two "lesser" engineering schools here in Texas. But he really wanted to go to UT Austin, which is a top-10 engineering school nationally. So we agreed. He was accepted into the honors engineering program at UT but no merit-based scholarships.
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Old 08-22-2018, 12:10 PM   #65
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Military scholarships are an excellent choice, and a search will turn up many dozens of high value scholarships.

Here is just one of many... a "SMART" scholarship that offers as much as $38,000/yr. for four years.

https://www.military.com/military-re...olarships.html

As I recall, the only obligation for most scholarships is a commitment for 2 years of active duty for ROTC scholarships.
IMHO... a great unseen benefit for the future of the student.

The SMART Scholarship requires one year of employment in a Department of Defense approved corporation for each year scholarship after graduation..
8 years for Army ROTC scholarships.

But, the above still pay for non-STEM majors.

Most other branches require STEM majors for scholarships.
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Old 08-22-2018, 01:35 PM   #66
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I don't have kids, but my one friend has put away $400K for her 13 yo son. They plan to retire before he turns 18 and are very conservative investors so wanted it all covered. Obviously, they only have 1 so they can be more generous. Only a portion of it is in 529 as they are not convinced he will spend it all, it will completely depend on where and what he goes for. They based this off their nieces who just graduated from private colleges and spent roughly $80k/year. Any money left over will be his to do with as he wishes basically front-loading his inheritance. It's an interesting concept, we shall see how that works out.

They wanted to give him options to also choose a trade and have money to start his own business if he chose to go down that path instead.

Granted I'm not sure how tax savvy that is as they have had to file taxes for him since he was 5, but I appreciate how conservative they are and that they just want their son to have every option since they can afford it now.

I always wondered because don't you have to treat college like retirement, ie more conservative the closer you get so that senior year you may be only making the 2-3% that fixed income provides.
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Old 08-22-2018, 10:38 PM   #67
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We put one through school at Purdue University and he had less than $60k in 529s. He still graduated with no debt because his internships paid so well. Two more kids to go and they will average between $80k and $90k each in their 529s which is plenty. We are blessed to live in a state with great public universities and I think the youngest will even be able to finish his Masters with the $90k.
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Old 08-22-2018, 11:03 PM   #68
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I have not saved anything for my daughter's education. My plan was to create enough annual free cashflow to pay for her collage by the time she is of college age. We are on track to do that. I live in Texas where you have no state income tax so it doesn't make lot of sense to open 529.
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Old 08-23-2018, 09:08 AM   #69
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Thank you for pointing this out. I rarely if ever hear people talk about over-contributing and/or the associated penalties. I do hear them talk about the transferability of 529's, how you can use it for you nieces and nephews, etc. Not sure about everyone else, but I feel an obligation to help my own children through college, and no one else's.
I've got tons of younger cousins and their kids, I think, could be made beneficiary on some part or all of the leftover 529 funds. I thought about approaching the parents and doing a deal where I would pay the U and they would pay me. Sounds illegal though, hehe!



So of the $50k stuck, the original principal, $25k comes out tax and penalty free. If I pulled the rest of it out at 28% marginal tax rate, plus the penalty, I'd only get $15k (rough numbers) for a total of $40k. What if I was paid $45k to pay out $50k. My cousin and I would each save $5k. Of course I'd never do it unless it was 100% legal.
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Old 08-23-2018, 09:41 AM   #70
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We did not use any education targeted savings for our 2 kids. We agreed to cover 50% of the state-school tuition and Room/board. We both felt that having a chip in the game would make them work harder. We simply budgeted it into out annual expenses. That was many years ago. If they decided to go out of state, that was on them for making up the difference either by working more in the summer, part time job during the school year, or scholarship.

DS1 went to State school and graduated. Since, has earned his Masters degree (on him)

DS2 decided the Jr College route, then entered the military. He is almost 20 years in now. He qualifies for various GI Bill plans. The neat part is that those benefits can be used for himself, his wife, or his child, possibly all three in various percentages.

Things were simpler (and less expensive) 20 years ago. I don't know how I would plan for kids today. Fortunately, that is behind us. I am thinking about helping out in some small way for our GD's education. Not sure exactly in what form. Probably a simple annual gift if necessary, or maybe help pay off any loans come graduation time. We are not sure how to be equitable if DS2's daughter takes her dad's GI bill benefits.
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Old 08-23-2018, 10:54 AM   #71
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We have 1 in college with 2 years left for undergrad.
  • We set aside $100k+ but haven't used it, we've cash-flowed (that's our LBYM lifestyle habits .... we will use it next semester)
  • We're paying ALL expenses for a 5 year degree at a top tier state school, including a car. Except - DD pays $5K every year out of her summer internship earnings. She also works during the school year.
  • We will help some with grad school, but she knows she's on the hook for the majority of her grad school expenses.
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Old 08-24-2018, 03:22 PM   #72
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....He likely needs a year or two of working abroad teaching or something (not his field) so he can travel. Degree was in International Studies, Czech, and Russian Studies. Anyone know of a perfect job...?
I have friends and colleagues still in the Navy with these majors and minors, so I would recommend looking at intel officer, or foreign area officer possibilities.
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Old 08-24-2018, 04:35 PM   #73
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I've got tons of younger cousins and their kids, I think, could be made beneficiary on some part or all of the leftover 529 funds. I thought about approaching the parents and doing a deal where I would pay the U and they would pay me. Sounds illegal though, hehe!



So of the $50k stuck, the original principal, $25k comes out tax and penalty free. If I pulled the rest of it out at 28% marginal tax rate, plus the penalty, I'd only get $15k (rough numbers) for a total of $40k. What if I was paid $45k to pay out $50k. My cousin and I would each save $5k. Of course I'd never do it unless it was 100% legal.
Do more due diligence but I don't see any reason why that would be a problem.
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Old 08-24-2018, 05:45 PM   #74
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I have one 9 y.o. child with about 43K in a 529 plan. We put a lump sum in when she was born (during the recession) and then contribute $100/mo. With that, and what we have saved elsewhere, I think that will be enough for a state school.
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Old 08-25-2018, 07:08 AM   #75
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[*]We're paying ALL expenses for a 5 year degree at a top tier state school, including a car. Except - DD pays $5K every year out of her summer internship earnings. She also works during the school year.
Curiosity only. Other than Architecture, what degree plans are now five years?
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Old 08-27-2018, 02:45 PM   #76
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100k, and ended up spending 150k from my own savings for a 4 year out of state engineering degree.
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Old 08-27-2018, 02:58 PM   #77
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So far I’ve put aside about $65k for three grandkids, starting at $20k/kid when born. Plan to continue to add to their 529 plans.

How does one convince grandpa to do this? My DF is multi-millionaire but "doesn't believe in 529s"


What would you suggest to a stubborn ole man with too much money?
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Old 08-27-2018, 03:20 PM   #78
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We have one DD, 11 years old, about to start 6th grade. We have about $95k in a 529 and add to it every month. Hope to get to $160k+ by the time she starts. Her $33k per year current tuition eats into the amount we can sock away for future tuition!
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Old 08-27-2018, 05:07 PM   #79
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How does one convince grandpa to do this? My DF is multi-millionaire but "doesn't believe in 529s"


What would you suggest to a stubborn ole man with too much money?

Convince? Not likely to happen. Either they want to or they don’t. We just set up the 529 plans and told our kids. We are still in control of the money and could pull it out if we wanted to, just having to pay tax and penalty on any earnings.
He may be willing to help with his funds after your kids are grown and ready to go to school. He may want them to have some skin in the game by earning scholarships or working.
He may let you inherit the money, or not, and let you figure how to do it.
We paid for one son for four years, then he was able to have his employer pay the rest. The other son was late to launch and used student loans, which we paid off after he completed his degree. Their grandparents couldn’t help.
My advice is to not pressure him, and be grateful for any gifts he does give. Keep him involved in your kids lives. If he wants to help he will.
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Old 08-27-2018, 05:23 PM   #80
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Nothing. But I've been paying anyway -

My step son needed some help and I know my step daughter will too. She was admitted to UCLA school of nursing and does have a 529, but only 30 grand in it, so that ain't gonna make it past year 1.
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