I've been a lurker here for 10 years. Just created an account and curious of your thoughts. Here is my dilemma: My wife and I have $1.5M in retirement and taxable accounts. We live very modestly and I am retiring at the end of the year (I am 41). We think the $1.5M is plenty provided our expenses are low and we use the 4% SWR. Moreover, we have pension that will hit later in life (45, 59, 70). I did the FIRE Calc and it says that we'll have plenty of money. So, my mind has shifted to estate planning.
I have 2 kids, 6 years old. I want to give them (tax free) money. My goal is to let them split $1M or $0.5M each at 18. I have a 529B for each of them, started at 1 YO that has $10K in it. I have a two GI Bills that were transferred to them for college so the 529B money is essentially gravy.
I am in the process of selling my last rental property (prepping for retirement). I may see $400K after the sale. This $400K is not calculated into out net worth. I read that an IRS tax code allows up to $70,000 single deposit (superfund) into a 529B for each child, by each parent. So, I'm thinking of funding $140,000 per child or $280K total into the 529B. Then, I would gift the IRS maximum of $14K per year, per child, per parent or $28K per year for each child until I reach the $0.5M.
So, starting now... Gifting $28K per year for 12 years (kids would be 18 YO) would be $336K, that money I would put into a taxable mutual fund account (in their name). Plus the 529B value of $150,000 (principal balance) would get me to the $0.5M for each child.
Does that sound reasonable? Has anyone done anything different for the kids/heirs?
I have 2 kids, 6 years old. I want to give them (tax free) money. My goal is to let them split $1M or $0.5M each at 18. I have a 529B for each of them, started at 1 YO that has $10K in it. I have a two GI Bills that were transferred to them for college so the 529B money is essentially gravy.
I am in the process of selling my last rental property (prepping for retirement). I may see $400K after the sale. This $400K is not calculated into out net worth. I read that an IRS tax code allows up to $70,000 single deposit (superfund) into a 529B for each child, by each parent. So, I'm thinking of funding $140,000 per child or $280K total into the 529B. Then, I would gift the IRS maximum of $14K per year, per child, per parent or $28K per year for each child until I reach the $0.5M.
So, starting now... Gifting $28K per year for 12 years (kids would be 18 YO) would be $336K, that money I would put into a taxable mutual fund account (in their name). Plus the 529B value of $150,000 (principal balance) would get me to the $0.5M for each child.
Does that sound reasonable? Has anyone done anything different for the kids/heirs?