How much do you have set aside for kids' college?

[RenoJay]

I was recently hanging out with some successful, professional friends and was surprised to hear they each have ~$200k/kid saved in 529's for kids who are aged 8 - 13. I have ~$100k saved for each kid in that age range, and figured I'd see how life turns out to determine the rest, assuming more is required. I'm curious how much others on this thread who have youngish kids have put aside specifically for college. (And I have no idea how to create a survey, so if someone else wants to add one that'd be fine.)

 

[Charlotte]

I have two kids in high school and have $130k put aside for each one in a 529 account. We are hoping both will be attending UNC Chapel Hill as they have the grades and scores to likely get in (crossing fingers as I type this... DS is applying right now). I feel very fortunate that NC has such a desirable public university option for us.

We are early retired and living off our stock portfolio, and our early looks at FAFSA seem to indicate there’s nothing at all available to us there. So although we have taken a peek at a few private colleges, I really can’t see dropping $275-300k on a bachelor's degree for each kid..... not when we can do Chapel Hill at in state rates.

 

[45th Birthday]

Our kids are finished with undergrad (still the possibility of grad school for both). However, while we funded a significant portion when they were younger, we did not fund what would have been the entire amount needed considering growth in value.

Several reasons. One, if investments tank, there is no way to realize a tax loss on this money. Two, one never knows what will happen. Three, the state tax deduction rules for our contribution favored doing it over a longer time. By the time they were in college, we were actually making the deposit and then immediately withdrawing it to harvest the state tax deduction.

As it turned out, the older child's 529 still has $26K sitting in it, and the younger one $2K (older one benefited longer from fast appreciation, younger one faced higher costs due to college cost inflation, both were funded equally).

 

[pb4uski]

Even though we had a high income and were in a high tax bracket I never found 529's compelling due to the restrictions and limitations.... we ended up not doing any 529s at all but saved for the kids college in taxable accounts (munis and equities).

As it turns out, DD got a scholarship that covered about 15% of her tuition/R&B (essentially a discount to entice her to select that school) and we were able to pay the remainder from cash flow since those were my peak earning years. We probably would have done the same for DS but he decided not to go to college (so far). I still have some of our taxable account funds earmarked in case he goes.

I'm very glad that we didn't have a bunch of money tied up in 529s... since it was in taxable accounts we can use it for the years before we had penalty-free access to tax-deferred money and before SS.

 

[LOL!]

One of my kids graduated from college after 4 years in 2018. The total cost for a Tier 1 state university was about $80,000 which included tuition, fees, room, board, books, travel to/from school. We received no financial aid at all, but did receive $10,000 ($2,500 each year) in tax credits.

We did save about $80,000 in a 529 plan, so there is plenty leftover for a master's degree.

The other kid went to a more expensive school, so there was no 529 money left at the end.

 

[corn18]

We saved $100k each for 2 kids. None of it was in 529s. Turns out we were brilliant as DD1 did not go to college. She applied, was accepted and 2 weeks before the first payment was due her life went a different direction. DD2 is starting her junior year and got some scholarships so her total cost will be around $80k for an in state school. I am now cash flowing her costs.

 

[Dtail]

Saved 104k for one and 135k for the other. One dropped out and one didn't. Took it all out of the market in 2006. Got lucky there.

 

[pb4uski]

We saved $100k each for 2 kids. None of it was in 529s. Turns out we were brilliant as DD1 did not go to college. She applied, was accepted and 2 weeks before the first payment was due her life went a different direction. DD2 is starting her junior year and got some scholarships so her total cost will be around $80k for an in state school. I am now cash flowing her costs.

Similar story here but reverse order... DD went but DS did not.

Now my dilemma is whether I somehow try to make the one who didn't go to college whole because of what it saved me or whether I look at it as they each had the opportunity to go on my dime and one took advantage of it and the other didn't. (BTW, I am still hoping that DS decides to go to college and would pay for it and have let him know that numerous times).

Saved 104k for one and 135k for the other. One dropped out and one didn't. Took it all out of the market in 2006. Got lucky there.

Were those in 529's or just in taxable accounts? If in 529's, were you hit with taxes and penalties when you took out the money for the one who didn't attend college?

 

[Dtail]

Similar story here but reverse order... DD went but DS did not.

Now my dilemma is whether I somehow try to make the one who didn't go to college whole because of what it saved me or whether I look at it as they each had the opportunity to go on my dime and one took advantage of it and the other didn't. (BTW, I am still hoping that DS decides to go to college and would pay for it and have let him know that numerous times).



Were those in 529's or just in taxable accounts? If in 529's, were you hit with taxes and penalties when you took out the money for the one who didn't attend college?

It was definitely not a 529 account. To my recollection, it was an UGMA? type of account. I am fairly sure we didn't get hit with any penalties or taxes. IIRC, there weren't any tax deductions when contributing.
I think the negatives with this type of account is it technically belongs to the child if not used. Thus I believe the 529's effectively replaced these type of accounts for tax advantage purposes.

 

[Texas Proud]

Currently one kid in college and his account is now zero... was a bit over $20K when he started..


Other child starting high school tomorrow and has about $25K in her account... I will not put any more in as I do not see any benefit for it at my zero tax bracket...


Also, these accounts count against your child when it comes to FAFSA... they assume 25% of that money each year, so having $200K means you can 'afford' $40K toward tuition etc. right off the bat... so nothing is going to be allocated to your child..

 

[RenoJay]

Thanks for replies. I’m the OP and these responses pretty much reflect where I am. And of the ~$100k for each kid, about 1/3 in 529 and 2/3 in UTMA since, as some of the examples above show, life doesn’t always go as expected.

 

[MarieIG]

Nada. Didn't do 529s. Everyone was limited to the equivalent of State tuition w/ room & board. (The one that I would have broken the bank for due to his high grades, took care of his own tuition.)

 

[The Cosmic Avenger]

About $40K for a child about to start their junior year in high school. Our wages started pretty low, so years ago we prioritized retirement savings. But now that we're making better money, as I've said previously in another thread, we plan on paying cash each year once the 529 is gone, and not taking out any loans.

 

[CaliKid]

I have two kids in high school and have $130k put aside for each one in a 529 account. We are hoping both will be attending UNC Chapel Hill as they have the grades and scores to likely get in (crossing fingers as I type this... DS is applying right now). I feel very fortunate that NC has such a desirable public university option for us.

We are early retired and living off our stock portfolio, and our early looks at FAFSA seem to indicate there’s nothing at all available to us there. So although we have taken a peek at a few private colleges, I really can’t see dropping $275-300k on a bachelor's degree for each kid..... not when we can do Chapel Hill at in state rates.

If they have the grades for a great school like UNC you might check schools like Princeton and Northwestern to name a couple. You can make a pretty nice income and still get automatic financial aid. For example under $65k is totally free but even at $250k they pay about 50% of tuition which makes it cheaper than a lot of public schools.

 

[CaliKid]

I forgot to answer the OP. Our two kids are in high school and we have about $250k each saved. We hope that will cover undergrad and at least part of grad school. It seems to us merely getting an undergrad degree is about like getting a high school diploma 40 years ago.

 

[flyingaway]

We did not set aside any money for kid's college, but paid (is paying) full cost on the go. We could not maximize our retirement contribution when we paid my elder son's private college.

 

[LOL!]

....
IIRC, there weren't any tax deductions when contributing.

There are no federal income tax deductions for 529 contributions anyways.

 

[Tiny Kingdom]

We have about $90k set aside for our 11th grader. That will cover one year at home and three away at an in-state school. I quit putting anything aside last year because I saw that he would likely need year at home vs. going away to school right out of the gate. Should he mature faster than predicted, we'll cover the shortfall out of income.

 

[rodi]

As the mom of a senior and a sophomore - this is a timely subject for me.

We have about $105k/kid in 529s. We have another $10k/kid in taxable accounts - but mentally earmarked for their college. (Not included in my retirement calculations.)

We've always said we'd fund 4 years at a public/state school. If they want to go private or out of state (to a non WUE school) they will have to figure out the difference. UC's are running about 30k/year, and CSUs are running a bit less.... so we're close enough to fully funded.

We met with FAFSA specialist - we do not expect assistance other than the tax credit. They suggested some ideas to reduce our assets for FAFSA purposes... but they all involved things that didn't really improve our odds of actually getting aid. FAFSA gives you an expected family contribution (EFC) but public schools completely disregard that and expect a much higher family contribution.

 

[Legally_dead]

$136,000 in 529s that will go towards college for two kids, currently ages 2 and 4. We also contribute an additional $200 per month.

 

[gcgang]

My daughter is a senior in high school this year. I think I screwed up any hope of getting aid by gifting her $ in a UTMA, as well as a little in 529. Our income might have qualified, around $150k, but I'm not expecting much help.

 

[tulak]

We only contributed to Coverdell accounts, 2k/year and started a few years after they were born. Ended up with 40k for the oldest, who’s starting his sophomore year at university, and the youngest, who’s starting her senior year in high school.

I never cared much for 529s and figured we’d pay as we go with the Coverdell accounts helping out. So far it’s worked out well for us. We only promised our kids in-state tuition, which is what happened with the oldest. The youngest may go to a more expensive school and if so, we’ll try and make up the difference, but we’ll see how that goes.

 

[NW-Bound]

The all-in cost of the large state university only a few miles from me is $27,530/year, as estimated by the school itself. Below is the breakdown.

In-state tuition: $10,792
Room and board: $12,209
Books and supplies: $1,125
Other expenses: $3,404

The cost for 4 years would be $110K total.

For out-of-state students, the tuition is $27,372/yr, bringing the total to $44,110/yr. The total cost for 4 years would be $176,440.

My children are in their 30s now, and they lived at home when in school, so it did not cost me as much as that. I had some money in their Coverdell accounts but it was not enough so I paid out of the general pile of money. I never knew what a FAFSA was.

 

[kevdude]

We have two kids, one entering junior year in high school, and one entering 8th grade. We have $64k in 529's for each. We'll pay the difference out of other assets.

Initially we told our kids that we'll pay in-state public university and if they go elsewhere the difference is on them. Lately, though, I think we've decided that if they can get in a top tier school such as Stanford, Princeton, etc, we will probably cover that. Our thinking is if they busted their arse hard enough to get in, we should make sure they get that education. This may be the case for our oldest as he'll probably graduate top 10 in his class and place in 98%+ percentile on SAT based on practice testing he's currently doing.

We don't expect any aid unless they get merit scholarships. We will have low taxable income this year (oldest will be entering college in 2020, so they will use 2018's income for FAFSA), but based on the calculators I've looked at for many different schools, our assets are too high to qualify for anything.

 

[bingybear]

I think I had maybe 15k in 529 total for two kids. I fignured we could pull what was needed without special handling.