urn2bfree
Full time employment: Posting here.
- Joined
- Feb 14, 2011
- Messages
- 853
This turns out to be a typical first world "problem." The kind of problem it is good to have...
I am not sure anything at all needs to be done, or can be done or should be done about this situation between my two sons, but it points up the effects of different life choices and SEQUENCE OF RETURNS effects, and the power of compounding---
Betweeen UTMA and 529 accounts, I saved up what were essentially equal, sizeable amounts to fund my two kids' educational choices. The older one went to school 3 years earlier, to a slightly more expensive private school and then also attended graduate school As a result of that, and because he began school fund withdrawals in the midst of the big market recovery, he ended up using up all of the money in his name. No worries. He has a great job, great salary, etc.
Meanwhile, the younger son is scheduled to graduate in May 2020 and even if he were to go to graduate school, which he is not considering at present, will wind up with A LOT MORE money in the UTMA, thanks largely to Mr Market and the timing of withdrawals after the big run up, as well as slightly lower tuition expenses. I did put a little more into the younger son's account early on -by mistake- and the compounding certainly has paid off for him. And the 529 will not even be anywhere near depleted.
I know I can reassign the 529 to a future grandchild or even to my own qualified educational expenses if I so desire-- or take the 10% penalty and pay the taxes if I really want to... but probably won't do that latter thing.
So should I encourage my son to do anything to "even things out?" . Or is this just the way the cookies crumble and there is nothing to be done?
I am not sure anything at all needs to be done, or can be done or should be done about this situation between my two sons, but it points up the effects of different life choices and SEQUENCE OF RETURNS effects, and the power of compounding---
Betweeen UTMA and 529 accounts, I saved up what were essentially equal, sizeable amounts to fund my two kids' educational choices. The older one went to school 3 years earlier, to a slightly more expensive private school and then also attended graduate school As a result of that, and because he began school fund withdrawals in the midst of the big market recovery, he ended up using up all of the money in his name. No worries. He has a great job, great salary, etc.
Meanwhile, the younger son is scheduled to graduate in May 2020 and even if he were to go to graduate school, which he is not considering at present, will wind up with A LOT MORE money in the UTMA, thanks largely to Mr Market and the timing of withdrawals after the big run up, as well as slightly lower tuition expenses. I did put a little more into the younger son's account early on -by mistake- and the compounding certainly has paid off for him. And the 529 will not even be anywhere near depleted.
I know I can reassign the 529 to a future grandchild or even to my own qualified educational expenses if I so desire-- or take the 10% penalty and pay the taxes if I really want to... but probably won't do that latter thing.
So should I encourage my son to do anything to "even things out?" . Or is this just the way the cookies crumble and there is nothing to be done?