How Much Can I Contribute to a 529
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| Nosotros have a ii month baby (get-go child). My parents (his grandparents) only ready up a 529 programme for him, where they are contributing $100/month. I was wondering how much we should be thinking nigh saving per month/twelvemonth (realistically), if our goal is to pay for his 4 years of college at an Ivy League or prestigious school in 18 or so years? |
01-26-2013, 03:19 PM | | |||
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| Quote: Originally Posted by roadwarrior101 Nosotros have a 2 month babe (get-go kid). My parents (his grandparents) just ready upwards a 529 programme for him, where they are contributing $100/calendar month. I was wondering how much we should be thinking about saving per month/year (realistically), if our goal is to pay for his four years of college at an Ivy League or prestigious schoolhouse in 18 or then years? Seriously? Princeton costs $58K today - four years of schooling at that rate is: $232K today! In 18 years, the cost assuming a 4% tuition aggrandizement rate will be the equivalent of $470K ($1100 a month for 216 months at four% rate of return). The boilerplate individual school runs around $45K, so you figure nigh $385K in 18 years. Right now, y'all only don't know what your child'southward capabilities volition exist, and then outset slow and as yous become more than aware - accommodate accordingly. Too, assuming you lot have an income below $100K, the Ivy's will offer more grants/merit to lowering the cost, unlike the wanna-be privates who remember trees will abound to the sky forever. BTW, congrats on the babe! |
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| How exercise you know what you'll need for a kid whose educational abilities are unknown? |
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| Quote: Originally Posted by FrmlyBklyn Seriously? Princeton costs $58K today - 4 years of schooling at that charge per unit is: $232K today! In 18 years, the cost assuming a 4% tuition inflation rate will be the equivalent of $470K ($1100 a month for 216 months at 4% rate of return). The boilerplate private school runs around $45K, so yous figure about $385K in eighteen years. Right now, yous simply don't know what your child's capabilities will exist, so start slow and every bit y'all become more aware - adjust accordingly. Besides, bold you take an income below $100K, the Ivy's will offer more than grants/merit to lowering the cost, different the wanna-be privates who retrieve trees will grow to the sky forever. BTW, congrats on the baby! Ouch. My question is it truly realistic for me to assume that college costs will go on to outpace inflation at such a rapid charge per unit? We're certainly not going to qualify for any income based scholarships, unless our economic situation deteriorates rapidly. We'd probably consider ourselves upper centre grade. However, this computer says I need to salvage around $1k/calendar month starting at present (or more than). Is it truly realistic to retrieve that in xviii years only the very rich and very poor volition exist able to afford college? The very rich would think that money is no object and the very poor would attain the scholarship. I just think something will have to give over the next few years to where incomes can take hold of up a bit to tuition expenses. |
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| Merely save what yous tin can comfortably, you lot may take another child. And do not forget to set aside enough for your retirement! You can figure out how much yous tin can beget when the fourth dimension comes. Like well-nigh people their pick of college will be dependent on how much you want to or tin afford. In 18 years, who knows what the student loan situation will be similar? At least this has been our game program... Concluding edited by gardener34; 01-26-2013 at 04:23 PM.. |
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| Quote: Originally Posted by gardener34 But save what you lot can comfortably, yous may accept another kid. And practise non forget to set bated enough for your retirement... yous can figure out how much you can afford when the time comes. Similar about people their choice of college will exist dependent on how much you desire to or can beget. In eighteen years, who knows what the educatee loan situation will be similar. We're maxing out our 401ks and both have decent company matches (have been doing that for a few years). Nosotros're in our mid-30s and already accept over $250k in our combined 401ks and IRA rollover. We've likewise built upwards an emergency fund for about 8 months, which is significant, since our income/expenses are pretty loftier. This is in a mutual fund that pays a dividend in excess of v% annually, and nosotros're trying to also contribute a decent corporeality per year. Nosotros've paid off all of our credit card debt, paying downward our student loans (are at a low stock-still rate). We bought a new townhouse in the Silicon Valley most three years ago, during the downturn, so we've built a couple hundred thousand in equity in this place. We'd like to exist able to afford a dream firm here, but information technology seems out of attain, despite the fact that we're both making well into the 6 figures and it looks like nosotros'll get a decent corporeality of connected career growth over the next few years. I guess the thing is that we desire it all and it may not be possible, unless nosotros eventually move to a lower cost area. |
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| Quote: Originally Posted past FrmlyBklyn How exercise you lot know what you'll demand for a child whose educational abilities are unknown? What does this have to do with anything. That wasn't the question. Wanted to know how much he should be saving based on certain assumptions. |
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| You are lucky you lot take stable employment, I have been laid off every iv-five years w/o fail... so no savings during those times when I accept been off piece of work for varying lengths of time. Luckily my spouse has had stable employment but is in an manufacture where offshoring is a continual threat. And then we are fanatics nearly having a "cushion" equally opposed to saving for higher. |
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| Quote: Originally Posted by gardener34 Sounds like y'all are in CA - unlike situations out there with in-state school tuitions if I recall. You lot may desire to see if CA has some bargain like they do here in IL, where you can prepay tuition and lock in a charge per unit? CA has lots of nice state schools. CA doesn't have the prepay thing for land schools. You are right that if you're going to a country schoolhouse, choosing one of the UC'south is almost equally proficient equally you lot tin get. Nonetheless, with all of the contempo budgetary problems we've had here, there is no guarantee that these will remain the tiptop state schools in a couple decades. As well, I am a graduate of one of the UCs. While I certainly would be pleased if my kid went to one of the UCs, if they were able to go into an Ivy or Stanford and we could afford to send them in that location, that would be fifty-fifty better. |
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