when to stop 529 contributions?

[Hibernian]

I think SecondCor521 above gave an informative answer. I can only add one other observation. I have only one, he started college this year. The programs he wanted to study were all out of state and when I did the sums, I was surprised to learn that private and out-of-state publics where he was admitted ended up about the same. Son took a small loan and got a scholarship so he has some skin in the game but as I look at the tuition and associated living costs, I think the money I've been saving since he was 3 years old and which I continue to contribute monthly to the 529 while he is in college, will just about get us through 4 years.

If there is left over which he won't be using for grad school, should that arise, I'd have no real qualms about paying the tax and 10% on gains. More likely, I'll stop contributing in year 4 and let any excess sit there for him or his kids in the future. Real point is college costs seem to be capable of pretty rapid increases so the sums I imagined needing 15 years ago look laughably naive now. I suppose people starting plans in 2021 with an eye to their kids attending college in 2038 will be in for the same experience. The 529 is never a decision I've regretted.

 

[Brat]

Yeah, you shouldn’t write off private schools until you see what kind of aid/scholarships they offer. Few will pay list price at private schools as many have huge endowments.

There is no state tax deduction here in CA so no incentive to keep funding. Even without my parents gift, I’m pretty close to fully funding a UC school. My oldest is hoping to attend a middle college program next year which will give him 1-2 years of college credit by the time he finishes high school. If he goes to a UC, he should graduate in 3 years or less.

That assumes he can get the classes he needs/wants.

My daughter attended Santa Clara, she observed that some students attended a JC to book required classes at much lower tuition.

 

[sergio]

I'm hedging my bets a little bit:

1. I expect my 2 kids to fund the first $20k, simply because I believe in them having some vested financial interest in the process.

2. I am now saving up $50k for each kid in 529s. About halfway finished.

3. After I fund $50k for each kid, I'm setting up a mix of taxable, bonds, and cash earmarked for education. Yes, I may need to pay a bit in taxes, but I like the flexibility.

4. Goal is to pay off the mortgage by the time the first one goes to college. That will add $1500/month of cash flow which can help as well.

 

[Al in Ohio]

You are the owner, they are beneficiaries. Any leftover you can move to your retirement fund if you wish.