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  #61  
Old 05-22-2019, 04:54 PM
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actuaryonFIRE actuaryonFIRE is offline
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There was some discussion earlier in the thread about mitigating the fears of over-funding a 529 with some good points made. The new Retirement SECURE act that has just gone through the Ways & Means Committee in the House allows from some 529 funds to be used to paydown student loans (even for siblings) which is a nice add.

You asked about how much to contribute. I did some exhaustive work on the minimum contribution required to fund a set amount for different time horizons (based on child's age) using historical returns. Search on my blog for "College Investment Strategies". [Hope that blatant plug is not too offensive...]
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  #62  
Old 05-23-2019, 10:58 AM
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Schroeder Schroeder is offline
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I have about $130,000 saved for #1 who will enter college next year, and about $110,000 saved for #2 who is a few years away.

#1 is going to an out of state public university, so the 529 reimbursable cost after merit scholarships will come pretty close to being covered for four years. I used my state 529 as there is a state income tax benefit for doing that.

Savings plan was $400 an month per child, reduced to $200 a month a few years ago. Grandparents have also contributed some each year.

My original goal in 2002 was $160,000 by age 18, but the 2008 recession put a dent in that.
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  #63  
Old 05-23-2019, 11:34 AM
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Quote:
Originally Posted by Schroeder View Post
I have about $130,000 saved for #1 who will enter college next year, and about $110,000 saved for #2 who is a few years away.

#1 is going to an out of state public university, so the 529 reimbursable cost after merit scholarships will come pretty close to being covered for four years. I used my state 529 as there is a state income tax benefit for doing that.

Savings plan was $400 an month per child, reduced to $200 a month a few years ago. Grandparents have also contributed some each year.

My original goal in 2002 was $160,000 by age 18, but the 2008 recession put a dent in that.
That's impressive. I hope your kids make good use of that money.
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  #64  
Old 05-23-2019, 11:57 AM
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Eddie Smith
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Interesting visuals posted here today on the dramatic rise in college tuition since the 1970s:

https://flowingdata.com/2019/05/22/cost-of-college/

It's not a coincidence that the steep run-up from the 1990s forward mirrors the mortgage market. The nearly unlimited availability of cheap debt to finance tuition is as much responsible for tuition inflation as anything. And now that the federal government essentially assumed ownership of virtually all of the trillion dollar student loan balance in the US, the parallels with housing are even stronger.

College in the US is now a highly leveraged investment for most households, and its secured by the earning potential of graduates. However, while paying cash for a home doesn't always make sense, I think if you can pay cash for education, that's a win. It's basically an inter-generational wealth transfer because your kids will avoid having essentially a mortgage payment out of college for 30+ years. Student loan payments can truly be a shackle around their necks. Student loans can't even be shed in bankruptcy. A student loan can only be retired by paying it off, and for many that can mean working in a job only for money instead of doing something more interesting.
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