Investing for Baby

[stoutboy]

DW and I are expecting our first child sometime in June. It's happening rather late in life for us, but no complaints--at least now I have no worries about us being able to afford it.

I'd like to bounce some ideas off the forum. First, for college, I'm thinking we'll do the Ohio 529. I was thinking of opening it with the max annual lump sum allowed by gift tax law (26K combined from both of us, I believe). In subsequent years we'll likely contribute $300 a month or so, and hope for 5% appreciation a year. That should bring us pretty close to the max allowed in these accounts, particularly if the grandparents chip in occasionally. I plan on doing the aggressive age allocation strategy (heavy in equities at first, moving more to cash/bonds as the time for matriculation draws nearer). All equity investments would be index funds.

My other idea is to create a separate "lifestarter" fund. I'm thinking for this I'll try to start it at 5-10K when the baby is born and put in at least $1500 per year until the child reaches 25. (Again, hopefully the grandparents would contribute too). This would consist of a US total market index and probably an emerging markets index. Why 25? Because we'll have college covered with the 529, and this would be a nice gesture for the anticipated start in life upon graduation--could be used for grad/professional school, down-payment on a home, or hopefully, just continued savings.

Are these good ideas? Would another arrangement be better? For my second idea, what type of vehicle offers the best return and lesser tax burden? I'm considering a trust of some kind. I'll certainly be consulting with a tax/estate attorney as the time draws near, but would like to engage the experience of the forum.

Sorry for the length of this post, and thanks/congratulations for reading this far!

[chinaco]

Congrats.

The fact that you are thinking about it and establishing an approach means the financial part will likely turn out fine.

Not sure how much money you are talking about... so this might not be relevant.

Lie starter plan is a great idea. Just keep in mind that most people at young ages make poor financial decisions. There is no way for you to know at this point if your child (no offense here) will be a prudent financial genius or a spend-thrift.

Determine how to maintain some control or influence over the assets until he or she gets out of the dumb years (or at least till they have matured as much as they are likely to). The dumb years vary. Some people get out of them very young... others do not do so until they are in their 30's... some never.


One way to do this is to buy an insurance policy... if you are healthy. Sometimes it makes sense. What happens if you meet and early demise and do not get an opportunity to accumulate the wealth?

[stoutboy]

Hey thanks, Chinaco. I think I have a pretty good life benefit from my employer--DW as well, but that is definitely something we have to nail down. It may be prudent to get an additional term policy up to where the child reaches the age of majority--as I noted, we're starting a family somewhat later than most people.

I think you're very correct about the risks involved with the 'dumb years'--the kid may turn out to be a spendthrift, and I hope we can avoid the trust fund baby mentality.

Still, I often have wondered why other parents haven't done something similar--sock away $50-100 a month in Vanguard or whatever, on top of any savings for college. It would add up to quite a little nest egg by the time the child is 20 or so. Maybe many parents do do something like this. I sure wish mine had!

Quote:

Originally Posted by chinaco Congrats. The fact that you are thinking about it and establishing an approach means the financial part will likely turn out fine. Not sure how much money you are talking about... so this might not be relevant. Lie starter plan is a great idea. Just keep in mind that most people at young ages make poor financial decisions. There is no way for you to know at this point if your child (no offense here) will be a prudent financial genius or a spend-thrift. Determine how to maintain some control or influence over the assets until he or she gets out of the dumb years (or at least till they have matured as much as they are likely to). The dumb years vary. Some people get out of them very young... others do not do so until they are in their 30's... some never. One way to do this is to buy an insurance policy... if you are healthy. Sometimes it makes sense. What happens if you meet and early demise and do not get an opportunity to accumulate the wealth?

[Charlotte]

Quote:

Originally Posted by stoutboy Still, I often have wondered why other parents haven't done something similar--sock away $50-100 a month in Vanguard or whatever, on top of any savings for college. It would add up to quite a little nest egg by the time the child is 20 or so. Maybe many parents do do something like this. I sure wish mine had!

We have 2 children (currently in elementary school) and are saving to cover 4 years at a public university . In today's $$, I am guessing about $80-100k for each child. We do not put aside additional money that is earmarked specifically for them, although we easily could. We keep our 'excess funds' in our name for several reasons:

I believe that having a secure retirement and the ability to take care of myself and my DH for the remainder of our lives is one of the greatest gifts I can give my children - they will never (I hope!) have worries that their Mom & Dad can't afford their medication, or a surgery and PT when someone breaks a hip, or long term care if it should become necessary. They will never have to worry that their Mom and Dad will be unable to pay their taxes, or their bills, or to enjoy a fulfilling life full of family, friends and travel and experiences.

As previously alluded to, there is a risk of your young adult child deciding that funding a trip across country in a van full of hooligans is a good use of the money you've gifted them. Sure, you intended the gift for graduate school, or for a downpayment on a house, but legally the money is theirs and they get to decide how to spend it. I am not ruling out that we might help each child with a biggish financial gift at some point (a downpayment on a house? a wedding? grad school? several great vacations?). But it would be on our schedule, and if our financials could allow it without harm to us.

I actually don't believe that you do your children any favors by paving every road for them. Should you, as a parent, pave some roads so they aren't too bumpy? Yes. But if you pave every road and eliminate every bump along the way, your child won't learn what it means to work towards something, to overcome obstacles and then have the satisfaction of achieving it themselves.


Charlotte

[stoutboy]

I understand what you're saying. If I dwelled on worst case scenarios, then I would be thinking along the same lines. I suppose one point of something like this could be seen as a sort of test--if it turns out that s/he blows it, I could easily factor that into my will.

I don't think it's necessarily a bad thing to pave this kind of road, as you put it--in the best of all worlds, it could provide the freedom to pursue what s/he really enjoys and finds most fulfilling. And a trust would allow more control to put preconditions--can't blow it on Lollapalooza for instance.

I've factored in our own retirement situation, and I'm as positive as I can reasonably be that this $1500 per year would not affect our circumstances in the slightest.

You certainly do raise some legitimate points and food for thought...

Quote:

Originally Posted by Charlotte We have 2 children (currently in elementary school) and are saving to cover 4 years at a public university . In today's $$, I am guessing about $80-100k for each child. We do not put aside additional money that is earmarked specifically for them, although we easily could. We keep our 'excess funds' in our name for several reasons: I believe that having a secure retirement and the ability to take care of myself and my DH for the remainder of our lives is one of the greatest gifts I can give my children - they will never (I hope!) have worries that their Mom & Dad can't afford their medication, or a surgery and PT when someone breaks a hip, or long term care if it should become necessary. They will never have to worry that their Mom and Dad will be unable to pay their taxes, or their bills, or to enjoy a fulfilling life full of family, friends and travel and experiences. As previously alluded to, there is a risk of your young adult child deciding that funding a trip across country in a van full of hooligans is a good use of the money you've gifted them. Sure, you intended the gift for graduate school, or for a downpayment on a house, but legally the money is theirs and they get to decide how to spend it. I am not ruling out that we might help each child with a biggish financial gift at some point (a downpayment on a house? a wedding? grad school? several great vacations?). But it would be on our schedule, and if our financials could allow it without harm to us. I actually don't believe that you do your children any favors by paving every road for them. Should you, as a parent, pave some roads so they aren't too bumpy? Yes. But if you pave every road and eliminate every bump along the way, your child won't learn what it means to work towards something, to overcome obstacles and then have the satisfaction of achieving it themselves. Charlotte

[52andout]

I am at the opposite end of the spectrum, my kids are in their thirties. From my experience watching them and their friends in their twenties many kids would have no idea how to handle money at that age. Fancy cars, travel, eating at fancy restaurants, buying designer purses etc would quickly eat up your hard earned money.

One of the greatest satisfactions in life is saying "I did this", not "I was lucky to be given this"

I really wanted to pay for my kids education, so I did. However, besides an old clunker car and some old furniture they were pretty much on their own after college graduation. They made some spending mistakes but are on the right track now and we have the option to give them generous gifts now if we choose. If they get to the point where they are buying a house etc you have the option at that time to gift them a nice chunk if you so please. I know a family that is wealthy who each Christmas give each child and each spouse a large cash gift, with the knowledge that it can be spent however they want and there is no guarantee it will go on every year as who knows what will happen with the economy, illness etc. I thought that was a great idea.

[fh2000]

Stoutboy,

My experience might not help you, but this is what we did. We have a 16 year old, and a 13 year old right now. My wife and I started UTMA/UGMA accounts when each of our child was born. In the mid-90's, our salaries were relatively low, so the thought at that time was that we wanted to set aside some education fund so we, as parent, will not for any reason dip into that money intentionally or unintentionally. We wanted to make sure the kids' education fund is there and safe.

We put $200 dollars each month into each account, and by the beginning of 2000, the combined accounts were close to 150K already. Their funds were invested mainly in technology mutual funds. We then had the unfortunate experience going thru 2000 and 2008 downturns. We have stopped putting any new money into their accounts since 2005 or so and I also switched all to index funds. Today, their balance is at around 180K or so after 10 more years and many more contributions.

In today's college cost, their money can barely allow them for California state universities. We may have to fund the extra from our taxable accounts if they choose private colleges. The money is theirs by UTMA/UGMA definition, but we don't tell them that. If they are good enough to get financial aid, that money can be used for their other needs such as a car, or furniture, etc. But, I won't know for a couple of more years. For now, our kids are on the right path and working hard to get good grades, so I feel our investment will be put in good use.

So, our focus in the beginning is to safeguard some money for them. In later years, when we had more means, we switched our focus on retirement preparation.

[sengsational]

Quote:

Originally Posted by stoutboy ... First, for college, I'm thinking we'll do the Ohio 529. ... I'm considering a trust of some kind. ...

I figured my kids would go to state school, and I wouldn't have to work on "getting a discount" to a private university. But it didn't turn out that way for me, so I had to learn about how to manage that discount (known as "Financial Aid"). If you or your child appear to have lots of assets, your discount will disappear!

Assets in the 529 are considered your (the parents') assets and are "expected to contribute" about 5 or 6 percent per year to the tuition bill. Funds in a trust are the child's funds, are expected to contribute about 20 percent per year. So you might want the child to appear penniless 17 years from now, and with a trust, that would be a problem. With 100K in a trust, your discount would be reduced by $20K (in other words, your expected family contribution "EFC" would be $20K higher). Whereas if it were in a 529 (your asset), your EFC would be only $5K higher).

If you're not familiar, there a loads of formulas and not all schools use the same ones, but generally the formulas look at your assets and your income and come up with what they think you can afford (EFC). They have "asset protection allowances", but it's a pittance. So if your kid gets accepted to an ivy that costs $60K, and your EFC was $30K, then the other $30K is covered by loans and grants (discounts). The classier schools don't like to drown their graduates in debt, so the grants often make up the lion's share of the delta.

Two facts that are important on the college topic:

1) The old adage about spacing out the births of your children to only have one in college at a time is WRONG! If you're poor enough to worry about two kids in college at once, you're also poor enough for financial aid and your EFC doesn't change (much) for more than one student. In other words, you have two in college at once, you pay (nearly) the same as if you had one there. A two-fer deal! Or even a three-fer, etc. So, get busy, and I'll congratulate you on your NEXT child's birth

2) Assets in retirement accounts are (currently) not included in the calculations. This includes 401k, IRA's, and annuities.

So my bottom line on this whole college savings thing would be to not do it!! If your kid goes to state school, you can probably just afford it. If your kid is super bright go-getter and gets accepted to an ivy league school, your positioned for the biggest discount (and your out of pocket will probably be similar to the state school). Instead of saving for college, put everything into your own retirement accounts, even if it means "insurance products" (shudder). By looking as poor as possible you will maximize financial aid.

--Dale--

[Nords]

Back in the 1990s, UTMAs were about the only tax-efficient way to go. Today's 529s are way better and are not held against your kid's assets for financial aid as much as a UTMA would be.

The amount you're setting aside sounds about right. We started at $100/week and managed to keep it going (after keeping our retirement savings on track) for most of 17 years. (Berkshire Hathaway did the heavy lifting.) Unless you're unhappy about being taxed out the wazoo, I would recommend putting only enough in the 529 for a good education at State U and then telling the kids that a more expensive private university is their problem. You can always meet them partway, and sending this message early & often will encourage them to take personal responsibility for their learning... instead of encouraging them to maximize the entertainment value of your 529 money.

If you haven't already planned to do so, you need to start shifting the asset allocation to bonds/CDs when they're teens. By the time they're 15-16 years old you should be out of equities. We had this epiphany in February 2008 and going to CDs was the only thing that avoided disaster.

If you're setting aside a lifestarter fund then I'd keep it with your own assets (not a UTMA) and dole it out at five-year intervals or save it for personal challenges like a life-threatening illness, a special-needs kid of their own, or divorce. Personally I'm very concerned about the corrosive effects of affluenza, and I've probably been tighter with the purse strings than our kid would prefer. She's learned an immense amount from our efforts, but she's not there yet. We assure her there will be no inheritance so that she's not counting on us as "Plan B". In my parent's case there was never a "Plan B" anyway.

When you dole out that lifestarter fund you could have them use it for their Roth IRA or their 401(k) (to max the match). The money isn't totally inaccessible but it isn't easily accessible either. Gotta know your kid, education is the key, hopefully they marry the right person. We're going to try something similar to that for our kid's profit-sharing of whatever's left of her college fund when she graduates.

When your kid turns age 14 (the minimum age in many states for a work permit) then you could start a Roth IRA for them with your lifestarter money. Our kid put 80% of her work earnings into her Roth IRA, and then we declared enough additional earnings on her income tax returns to max out her annual contributions. (She earned it from doing home jobs & projects.) Of course you could start that Roth IRA for them now, using the income they earn from baby-model photos or being a child performer, but the IRS might take a dim view of other schemes.

I've been very surprised by how much money we spent on getting our kid into college. We attempted the philosophy of launching her from the nest the right way the the first time (and the only time). We made several trips to campuses so that she could learn what to look for, what questions to ask, and whether she'd fit in. There were additional fees for not one but two summer programs to "make sure this is the one". (They were not.) There were many many fees for SAT prep programs, software, iPhone apps, and study materials (probably about $400) and the SATs themselves (third try did the trick). There were additional "SAT II" exams required by some colleges. Just about every college wanted $65 to submit the application (NROTC requires applying to at least five colleges), and even the high schools charge for the dozen or so transcripts that you'll be sending out. Then there's all the plane fares (for families weekends as well as holidays & summer vacations), the excess-luggage fees for that first trip to the campus, the postal fees for all the boxes you'll be sending by mail, and the never-ending stream of care packages. There is also the college laptop, the campus bicycle, the dorm room setup expenses, and the mandatory smart-phone data plan. Unless you're within driving distance of all these campuses, or planning to send your kid to State U, then it would not be inappropriate to set aside at least $8K-$10K.

But we visited her last month and she's loving it. Pending the result of this semester's academic probation, I don't think she's comin' back...

[sengsational]

Quote:

Originally Posted by sengsational So my bottom line on this whole college savings thing would be to not do it!!

I should have been more clear. I wouldn't save in a non-retirement account. You can pull cash out of IRA's for educational purposes, but that would be a last resort, and the EFC calculation wouldn't "make you" pull that money out. Whereas if it's in a 529 or (the really wrong approach) a trust, then they DO expect you to cash it in for tuition. Of course, the EFC calculations could change, and probably will, but at the moment, there's no incentive to save money (where they can "see" it) if they reward you for being poor!

--Dale--

[folioboost]

A quick word about 529 accounts - My wife and I recently had our first child and once things settled down my first instinct was to start funding a 529 account. Unfortunately, even at Schwab, the cheapest alternative charged about 1.4% in management fees.

I ran the numbers and, over 18 years, this essentially eats up the entire tax benefit of the 529 when compared with low cost index funds in a regular taxable account. I assumed an 8% annual return and all stocks. If you are investing in high yield debt (unlikely), the 529 may be better.

Anyway, a 529 can still be a good alternative, especially if your state offers a state tax deduction, but please be aware of fees before jumping in. For me, I decided just to save for the little guy's college in a regular account.

[sengsational]

Quote:

Originally Posted by folioboost I ran the numbers ... I decided just to save for the little guy's college in a regular account.

I like that approach too. Of course I'd only do that if I'd maxed-out Employer-match 401k, Roth IRA, Non-Employer-match 401k (used in that order).

--Dale--

[LOL!]

I see no reason whatsoever to save/invest in a separate account for a child unless there are some monetary benefits over saving in your own name. Such a benefit might be tax benefits. Even so, you should have your retirement completely locked down before even thinking about a separate account like a 529 plan for a child.

After all, you can always give your child your money anytime you want to. If you die, your kid might become an instant multimillionaire anyways.

We have 529 plans for our kids, but only started them after we were financially independent. We also did not overfund them, so that there is no chance of unused assets going forward.

When our oldest starting working in high school, she got to spend most of her money. Some went for her own college savings and the rest she spent. Nevertheless, we made her open a Roth IRA and fund it to the max possible by giving her some money.

@folioboost, 529 plan assets should have expense ratios below 0.4%. I am unsure why you didn't appear to look beyond Schwab at the host of 529 plans with low expenses.

[SunsetSail]

Quote:

Originally Posted by folioboost A quick word about 529 accounts - My wife and I recently had our first child and once things settled down my first instinct was to start funding a 529 account. Unfortunately, even at Schwab, the cheapest alternative charged about 1.4% in management fees. I ran the numbers and, over 18 years, this essentially eats up the entire tax benefit of the 529 when compared with low cost index funds in a regular taxable account. I assumed an 8% annual return and all stocks. If you are investing in high yield debt (unlikely), the 529 may be better. Anyway, a 529 can still be a good alternative, especially if your state offers a state tax deduction, but please be aware of fees before jumping in. For me, I decided just to save for the little guy's college in a regular account.

Check out www.upromise.com It is NV's plan managed by Vanguard. If you don't mind big brother tracking your spending you can get an extra hundred a year or so depending on the products you buy. My state doesn't offer a tax deduction but the plan numbers work out for me...at least the last time I checked. It takes a bit of navigating to avoid the ad junk and extras on the website but it has worked well for me. FYI - I only put in about 45% of what I will contribute for my kids' education - the rest will come from regular savings for flexibility.

[FinanceDude]

Quote:

Originally Posted by folioboost A quick word about 529 accounts - My wife and I recently had our first child and once things settled down my first instinct was to start funding a 529 account. Unfortunately, even at Schwab, the cheapest alternative charged about 1.4% in management fees. I ran the numbers and, over 18 years, this essentially eats up the entire tax benefit of the 529 when compared with low cost index funds in a regular taxable account. I assumed an 8% annual return and all stocks. If you are investing in high yield debt (unlikely), the 529 may be better. Anyway, a 529 can still be a good alternative, especially if your state offers a state tax deduction, but please be aware of fees before jumping in. For me, I decided just to save for the little guy's college in a regular account.

In a lot of states, the state tax deduction isn;t that big a deal, like here in Wisconsin, we only get a $3,000 tax table reduction, saving us about $226 a year. I would rather take a plan from another state with low ER funds, and you'll make the state deduction up in the first year.......

[fh2000]

Quote:

Originally Posted by LOL! I see no reason whatsoever to save/invest in a separate account for a child unless there are some monetary benefits over saving in your own name. Such a benefit might be tax benefits. Even so, you should have your retirement completely locked down before even thinking about a separate account like a 529 plan for a child.

I have UTMA accounts for my two children. I filed income tax returns for each child each year using TurboTax and, per my calculation, I saved few dollars overall that way since the first $850 from interest and dividend is tax free for their returns, as opposed to including those into my own return.

[stoutboy]

Nords,

This is great advice, and I thank you for taking the time to share your experiences. You've given me much to think about.

Thanks also to all others who have responded. For now, I am all but certainly going to start a 529, probably the Ohio one, as the ER is even lower than Vanguard's Nevada plan. (The one poster who mentioned the high fees of Charles Schwab as the reason why he is not doing a 529 should consider these state plans--many of the ERs are well less than one percent).

I'll think more about the lifestarter fund--I like Nords' idea of using it to start a Roth IRA for baby when s/he reaches the minimum legal age for one.

Quote:

Originally Posted by Nords Back in the 1990s, UTMAs were about the only tax-efficient way to go. Today's 529s are way better and are not held against your kid's assets for financial aid as much as a UTMA would be. The amount you're setting aside sounds about right. We started at $100/week and managed to keep it going (after keeping our retirement savings on track) for most of 17 years. (Berkshire Hathaway did the heavy lifting.) Unless you're unhappy about being taxed out the wazoo, I would recommend putting only enough in the 529 for a good education at State U and then telling the kids that a more expensive private university is their problem. You can always meet them partway, and sending this message early & often will encourage them to take personal responsibility for their learning... instead of encouraging them to maximize the entertainment value of your 529 money. If you haven't already planned to do so, you need to start shifting the asset allocation to bonds/CDs when they're teens. By the time they're 15-16 years old you should be out of equities. We had this epiphany in February 2008 and going to CDs was the only thing that avoided disaster. If you're setting aside a lifestarter fund then I'd keep it with your own assets (not a UTMA) and dole it out at five-year intervals or save it for personal challenges like a life-threatening illness, a special-needs kid of their own, or divorce. Personally I'm very concerned about the corrosive effects of affluenza, and I've probably been tighter with the purse strings than our kid would prefer. She's learned an immense amount from our efforts, but she's not there yet. We assure her there will be no inheritance so that she's not counting on us as "Plan B". In my parent's case there was never a "Plan B" anyway. When you dole out that lifestarter fund you could have them use it for their Roth IRA or their 401(k) (to max the match). The money isn't totally inaccessible but it isn't easily accessible either. Gotta know your kid, education is the key, hopefully they marry the right person. We're going to try something similar to that for our kid's profit-sharing of whatever's left of her college fund when she graduates. When your kid turns age 14 (the minimum age in many states for a work permit) then you could start a Roth IRA for them with your lifestarter money. Our kid put 80% of her work earnings into her Roth IRA, and then we declared enough additional earnings on her income tax returns to max out her annual contributions. (She earned it from doing home jobs & projects.) Of course you could start that Roth IRA for them now, using the income they earn from baby-model photos or being a child performer, but the IRS might take a dim view of other schemes. I've been very surprised by how much money we spent on getting our kid into college. We attempted the philosophy of launching her from the nest the right way the the first time (and the only time). We made several trips to campuses so that she could learn what to look for, what questions to ask, and whether she'd fit in. There were additional fees for not one but two summer programs to "make sure this is the one". (They were not.) There were many many fees for SAT prep programs, software, iPhone apps, and study materials (probably about $400) and the SATs themselves (third try did the trick). There were additional "SAT II" exams required by some colleges. Just about every college wanted $65 to submit the application (NROTC requires applying to at least five colleges), and even the high schools charge for the dozen or so transcripts that you'll be sending out. Then there's all the plane fares (for families weekends as well as holidays & summer vacations), the excess-luggage fees for that first trip to the campus, the postal fees for all the boxes you'll be sending by mail, and the never-ending stream of care packages. There is also the college laptop, the campus bicycle, the dorm room setup expenses, and the mandatory smart-phone data plan. Unless you're within driving distance of all these campuses, or planning to send your kid to State U, then it would not be inappropriate to set aside at least $8K-$10K. But we visited her last month and she's loving it. Pending the result of this semester's academic probation, I don't think she's comin' back...

[sengsational]

Quote:

Originally Posted by stoutboy For now, I am all but certainly going to start a 529

That does have the benefit of keeping college savings separate from other savings, but suffers from the fact that it will be visible in the financial aid formulas. That's why I suggested I'd only do 529's after I'd maxed-out the 401k and Roth options because those have all the benefits of a 529 (grows tax free, able to pay education expenses without penalty, etc), but have one more benefit the 529 does not: invisible to the financial aid EFC calculation!

[FUEGO]

stoutboy,

We have done something similar for our 2 daughters (age 4 and 5). $5000 a year total into 529's (low cost vanguard index funds or lifestrategy balanced funds that have an extra 0.25% administrative charge). This $5000 maxes our state tax deduction for contributions. We also keep UTMA accounts for each, and they usually get a couple hundred a year in cash gifts for bdays and christmas (mostly from us) that go into these UTMA accounts. They aren't really big right now, but might be enough to buy a decent new or lightly used car when they graduate high school or college. I like the idea of "laundering" the UTMA money into a Roth as well once they get old enough.

Our primary savings focus is still our own retirement. We figure we can always use some of our annual expenditures on college or adult kid expenses if we really have to. College will probably be paid for by a combination of 529 funds, summers working, their own savings from HS jobs, scholarships, grants, and student loans. Our state U's are currently very affordable, and hopefully will remain so for the next 12-17+ years.

[SunsetSail]

Quote:

Originally Posted by FUEGO stoutboy, We have done something similar for our 2 daughters (age 4 and 5). $5000 a year total into 529's...

I ran some numbers for my state's public Us based on expected higher ed inflation then backed into target amounts at various dates based on an expected average rate of return. I don't have the spreadsheet here but I think I came up with about $160K per kid. Based on your numbers, I think you came up with a similar number for half the costs. My boys are younger (1 and 3), but that shouldn't make a huge difference.

If you did a similar exercise, do you care to share what total you came up with? I'm interested to see if I'm in the same ballpark as others. I front-loaded the 529 mainly to help annual cash flow and only plan on funding 45% with 529s, but that won't make a difference in expected costs.