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Old 05-15-2014, 06:49 PM   #21
gone traveling
Join Date: May 2014
Posts: 153
I am just walking backwards, forwards. Maybe we are viewing the same picture from different perspectives.

The 529s, are devided by 250 - 500/mn and totals at 103k - 21k. Ages 8 - 3. Does not appear that dds will qualify for Need based aid. Merit aid may be possibility and highly dependent on the school. Understand that 529 is seen as a single sum by the school, regardless of who the beneficiary or how the funds are allocated between the siblings.

assumptions: 1. Goal is to fund college to the maximum extent possible given a risk tolerance; 2. Risk tolerance changes as dds approaches college. (age based, years to college, essentially a retirement scenario). 3. Instate schools, $30,000/yr current, 4 years undergrad.

The following you will need a Calculator,and maybe run Firecalc for confidence. Simple savings calculator --

DD1 is done now, if 529 can achieve an average of 6.5% growth for 10 years (18yo), no additional contributions needed. COA is increasing @5%, 12 years to college junior, $30,000/yr current-$120,000/4 years. Cost of Attendence for college in 12 years=$215,000. DD1 with $103,000 can grow for 10 years (18yo) @6.5% = $193,345. And if $500/mn contribution is done for next 10 years = $276,679. DD1 is done.

DD2 age 3, with $21,000 is looking at college $120,000 current COA in 17 yrs (age 20) or $275,000. DD2 receives contribution of $200/mn for 15years @6.5% growth = $113,755. DD1 is way short in college funding and either must have more monthly contribution, be more aggressive to get the higher ROI.

I am ignoring the most important rules: The closer you get to the day you start withdrawing-Reallocation becomes more important. Another is the first contribution will return more than the last- DD1 has 5 years on DD2. But DD2 has 15 years or investing vs just 10 years on DD1.

Again it may all be perspective and assumptions. I am not a great advocate of 529, although 529 may be an important part in funding college.

Run FireCalc, savings calculators, and college funding calculators. Vary the assumptions.
Therefore DD2's 529, needs to be ramped up.
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