So another post about various ways to save for college.
Background: $400k+ single W2 earner, job/income stable, MFJ, 2 kids, 58yo when 1st child is college bound, and no plan to FIRE. I max out all pre-tax retirement 46k/y, and have access to 60k+/y of mega back door Roth (but has yet be close to max it out).
Current 529 (CA, no state deduction):
Kid 1: 88k; Kid 2: 44k
My assumptions:
a. Both kids will go to some kind of college (they will not overlap).
b. Job and income are unlikely to change.
c. I will be working until my 60's, so it's unlikely that we will qualify for any need based aid on income alone.
c. In-state flagship public school costs 160k/4y now, and will cost 250-300k/4y in 10 years (5% inflation). Private will cost 2x that.
My plan/questions:
1a. Should I continue to contribute to 529?
1b. If yes to 1a, should I superfund the 529 to reach the current in-state figure ASAP? Is it reasonable to expect the investment to keep up with the inflation of the college cost?
1c. I think I made a mistake with my projection when I started funding the 529 4 years ago: I expected 7% annual return until age 18. Should I instead be moving the 529s to more conservative investments by age 15, therefore expect a lower return?
2. Should I contribute to MBR instead?
3. A combination of 1 and 2? e.g. Roth to cover the latter years if the kid ends up in private, by then I will be 59.5+
4. Anything else I missed? Given the uncertainty of future LTCG, I don't see advantage of brokerage over Roth.
TY
Background: $400k+ single W2 earner, job/income stable, MFJ, 2 kids, 58yo when 1st child is college bound, and no plan to FIRE. I max out all pre-tax retirement 46k/y, and have access to 60k+/y of mega back door Roth (but has yet be close to max it out).
Current 529 (CA, no state deduction):
Kid 1: 88k; Kid 2: 44k
My assumptions:
a. Both kids will go to some kind of college (they will not overlap).
b. Job and income are unlikely to change.
c. I will be working until my 60's, so it's unlikely that we will qualify for any need based aid on income alone.
c. In-state flagship public school costs 160k/4y now, and will cost 250-300k/4y in 10 years (5% inflation). Private will cost 2x that.
My plan/questions:
1a. Should I continue to contribute to 529?
1b. If yes to 1a, should I superfund the 529 to reach the current in-state figure ASAP? Is it reasonable to expect the investment to keep up with the inflation of the college cost?
1c. I think I made a mistake with my projection when I started funding the 529 4 years ago: I expected 7% annual return until age 18. Should I instead be moving the 529s to more conservative investments by age 15, therefore expect a lower return?
2. Should I contribute to MBR instead?
3. A combination of 1 and 2? e.g. Roth to cover the latter years if the kid ends up in private, by then I will be 59.5+
4. Anything else I missed? Given the uncertainty of future LTCG, I don't see advantage of brokerage over Roth.
TY
Statistics: Posted by hedge_hog88 — Sat Sep 28, 2024 9:07 pm — Replies 0 — Views 73