I generally agree @Andre (my son is 17 so this is very real right now) but one question, would you change your approach if the state you lived in provided tax discounts for contributions?
For example, NY (where I live) provides a state tax discount for up to $10K/year in contributions, so I have done annual funding versus the fully up-front approach.
I have one in college now and one two years off. Covering public instate for both but there’s an open question on private or out of state for the younger one. I always said I wouldn’t cover private but I am struggling with the decision.
I would love to read more writing from you on kids and FIRE Andre. Hitting FIRE when single feels far easier than when you’re responsible for others. I loved Morgan Housel’s chapter on “Your Money and Your Kids” and the two pages just before that chapter in The Art of Spending Money, and I’d love to hear your take on it, including the challenge of how children feel the need to build a better life than their parents, which can be hard if your parents are very successful financially.
We’re in a similar spot; my daughter is 8, I have no idea what college will look like and thus I’m trying to prep for multiple outcomes.
529 is at about 85, taxable custodial brokerage is higher.
(My plan is in her teens start teaching her some of fundamentals of investing so that when turns 18 and gets the brokerage, she at least knows what she has and the ups/downs of different things she can do. I also want to add a Roth and/or Trump account later this year)
I love balancing the 529 with the taxable brokerage account designated for college (or not college!). I tend to stick to targeting 2 years of public in-state cost in the 529 and the rest in a brokerage. I wish a had a crystal ball to perfectly predict what should I put in there. In case you haven't come across it I also really like this calculator: https://vanguardcollege.ssnc.cloud/csp.php
I'm in a similar position -- and although I don't want to significantly overfund a 529, I understand that $35k can be converted to Roth IRA over my child's lifetime (subject to annual limits)
+1 on more FIRE with kids posts. My daughter is half the age of yours, so you are my sensei and I your grasshopper :)
I generally agree @Andre (my son is 17 so this is very real right now) but one question, would you change your approach if the state you lived in provided tax discounts for contributions?
For example, NY (where I live) provides a state tax discount for up to $10K/year in contributions, so I have done annual funding versus the fully up-front approach.
Yea, being able to reduce your state taxable income by $10k per year would change the calculus.
I’d likely do what you are currently doing all the way until they graduated!
I have one in college now and one two years off. Covering public instate for both but there’s an open question on private or out of state for the younger one. I always said I wouldn’t cover private but I am struggling with the decision.
I would love to read more writing from you on kids and FIRE Andre. Hitting FIRE when single feels far easier than when you’re responsible for others. I loved Morgan Housel’s chapter on “Your Money and Your Kids” and the two pages just before that chapter in The Art of Spending Money, and I’d love to hear your take on it, including the challenge of how children feel the need to build a better life than their parents, which can be hard if your parents are very successful financially.
We’re in a similar spot; my daughter is 8, I have no idea what college will look like and thus I’m trying to prep for multiple outcomes.
529 is at about 85, taxable custodial brokerage is higher.
(My plan is in her teens start teaching her some of fundamentals of investing so that when turns 18 and gets the brokerage, she at least knows what she has and the ups/downs of different things she can do. I also want to add a Roth and/or Trump account later this year)
I love balancing the 529 with the taxable brokerage account designated for college (or not college!). I tend to stick to targeting 2 years of public in-state cost in the 529 and the rest in a brokerage. I wish a had a crystal ball to perfectly predict what should I put in there. In case you haven't come across it I also really like this calculator: https://vanguardcollege.ssnc.cloud/csp.php
I'm in a similar position -- and although I don't want to significantly overfund a 529, I understand that $35k can be converted to Roth IRA over my child's lifetime (subject to annual limits)
Yeah, the Roth piece never felt super compelling to me. That has made me very reluctant to get to the point of potentially overfunding the 529.
My child's 529 is also in "coast" status as I don't plan to contribute anything more beyond what we've already funded and we won't need it until 2031
Spot on - when facing uncertainty, optionality is key!