Question about 529 plan for college (especially for those in the finance field)

DH's brother is "intense" to say the least when it comes to finances, I guess b/c he is in that field. Apparently he has calculated that in 18 yrs. college will cost somewhere around $330,000 (including room, board, food, gas & other expenses I think it is alittle over the top) for 4 years of college. He told us he will opening a 529 and plans on putting in $500+ a month in it to reach the $330k. I definetely think opening a 529 is a smart idea and will be doing it for DS, but I feel that $500/mo. is ALOT especially when you plan on having more than 1 child. I do think college is going to be astronomical in 18 yrs. by the time are DC's go off to college but I believe at that point b/c of the cost they are going to have to offer more scholarships, grants and better financial aid. I just don't know that shoveling all that money away each month is necessary. I want to make sure to put money away for our children for college, but at the same time, I also want to be able to enjoy our children and give them nice things and nice trips, etc. now.

How do you feel about the 529? Have you opened up one yet for your DC? What do you think about college 18 yrs. from now?

Message edited 10/16/2007 5:57:09 PM.

Re: Question about 529 plan for college (especially for those in the finance field)

We opened one for DD as soon as she was born. We put away $600 a month for just one of our DC (once the 2nd arrives, I'm sure we'll be opening a 2nd 529.) And yes, 4 yrs of college will run you between 350-400k for one child.

Re: Question about 529 plan for college (especially for those in the finance field)

I don't agree at all that college will be only for the rich in 18 years, and I doubt there will be more federally-subsidized programs to fund college for the average middle-class family. In terms of financial aid, yes, they could do loans, but it would have to be paid back.

It depends on where you want your kids to go to college. I never want to feel like my kids would decide on a school based on the cost. If they wanted an ivy league school and I could afford to help as my parents did for me, I would never want them to turn it down to go to a cheaper school and later regret it.

If your BIL has the money and can afford to put aside that much each month, I think it's a great idea. I wouldn't put no money towards retirement to put everything towards the college fund, but if he can split the money and put towards both, I think that is a good compromise.

I think his estimate of the cost is close to what it probably will be, but our salaries will hopefully also be more by then to reflect the cost of living increase.

Re: Question about 529 plan for college (especially for those in the finance field)

Hey Crissy! Colin has a 529 plan...so far all that is in it is his Christening money. But we've earned about $300 so far sinch August. $500 a month is a little over the top IMO but college will be so expensive by the time our boys get to that time in their lives. I could see it costing $250,000 a kid by then (If they need room and board). It is not a bad idea to start a 529...just put in what you can. Something is better than nothing and your money will grow faster than you can imagine. (Did i ever tell you that Eric was a Pension Administrator before he became a teacher? He is sooo into this kind of stuff)

Re: Question about 529 plan for college (especially for those in the finance field)

That's why my kid needs to be a genius and get a full ride!!!!

No seriously, we will put in what we can afford and lil junior will have to pony up some of his own $$$ if he/she wants a more $$ school.......

Re: Question about 529 plan for college (especially for those in the finance field)

My financial advisor Suzy Orman advises that you should focus more on saving for your own retirement than for your children's college fund. Not to say that you shouldn't have a college fund for your kids (529's are awesome and I wish they had been available for my parents 28 years ago!) but as you say, there will always be scholarships and loans available to them. Once you retire no one is handing money to you!

If your brother in law has $500 to put away each month it would probably be a good idea to split the money between the 529 and his retirement account.

All hail Suzy!!

Re: Question about 529 plan for college (especially for those in the finance field)

Posted by jellybean1420

DH's brother is "intense" to say the least when it comes to finances, I guess b/c he is in that field. He and SIL are having their 1st child this December. Apparently he has already calculated that in 18 yrs. when it is time for their DD to go to college, it will cost somewhere around $330,000 (including room, board, food, gas & other expenses I think it is alittle over the top) for 4 years of college. He told us he will opening a 529 and plans on putting in $500+ a month in it to reach the $330k. I definetely think opening a 529 is a smart idea and will be doing it for DS, but I feel that $500/mo. is ALOT especially when you plan on having more than 1 child. I do think college is going to be astronomical in 18 yrs. by the time are DC's go off to college but I believe at that point b/c of the cost they are going to have to offer more scholarships, grants and better financial aid. I just don't know that shoveling all that money away each month is necessary, especially b/c in reality noone knows for sure what college is going to cost or what anything is going to be like in 18 yrs.
In my opinion, I believe that college is going to be for "rich" people in 18 yrs. the way it was in the past when our parents were that age so they are going to have to offer more $$$ in various ways. I want to make sure to put money away for our children for college, but at the same time, I also want to be able to enjoy our children and give them nice things and nice trips, etc. now. BIL's wife is a teacher and gets a retirement so he mentioned having her stop putting money into retirement and putting it towards the 529. I dont know that is such a smart idea. DH gets a good pension too, but I would never want him to stop putting into his retirement for various reasons. I would rather keep putting that money into his retirement accounts and than using it for college in the future if we dont need to use it for housing and general expenses.

How do you feel about the 529? Have you opened up one yet for your DC? What do you think about college 18 yrs. from now?

Re: Question about 529 plan for college (especially for those in the finance field)

I think that college savings is one of those things that varies so much. DH and I are trying to save as much as possible to allow them to have as many options as possible, something I didn't have went I was applying to colleges. We don't save in a 529, we have it invested in other vehicles.

The CFO of a company I worked with told me that he wasn't saving anything towards his kids college education - he and his wife put themselves through college and their kids can too.

My father's wife tells her 3 kids that if they get through the first 2 years of college funding themselves, she'll pay for the last 2. She doesn't want them to pi$$ away her money partying and getting tossed out of school. She thinks they will take it more seriously if they have to pay themselves (which didn't work, so far both of her sons have been tossed from several schools).

Re: Question about 529 plan for college (especially for those in the finance field)

I disagree with your BIL putting $500 into a 529 if it requires less contribution to a employer matched 401K. By no means am I a financial advisor, but I've heard numerous times from financial advisors that your retirement comes first, followed by college savings, etc. There are a ton of loans out there for college, but no one but yourself is going to fund your retirement.

So unless they are also contributing a sufficient amount to their 401Ks that will give them ample income at their retirement, I think they are making a bad judgement call underestimating their retirement needs. JM2Cents

Re: Question about 529 plan for college (especially for those in the finance field)

I was fortunate enough to not have any student loans, my parents paid for my college but I was also an only child. I just want to make sure I make the right investments and right decisions for my kid's future. If you're the average household making average salaries I dont see how it is possible to save $300+ for 3 kids to go to college. We will do the best we can and hope our DC's are either super athletes or super smart

Re: Question about 529 plan for college (especially for those in the finance field)

Message edited 10/16/2007 5:52:37 PM.

Re: Question about 529 plan for college (especially for those in the finance field)

Re: Question about 529 plan for college (especially for those in the finance field)

Honestly, there are a lot worse things in life that having to take out student loans. Not saving for retirement is one of them!!! If he can afford to do both, great! But to sacrifice retirement money (which you will definitely need) to pay for college (which you may or may not need) is just foolish, IMO.

Re: Question about 529 plan for college (especially for those in the finance field)

I also highly doubt those calculations assume tuition at a state school. I went to a state school and I think I got a wondeful education. I don't have any children yet but I do plan on putting some money away each month to help with college costs.

In all honesty you never know what your children will do with their future or even if they will choose to attend college. I highly agree with the post about making sure to save for retirement and then if possible setting up college savings.

Re: Question about 529 plan for college (especially for those in the finance field)

I opened one,...DS is 5 months old...we are putting what we can in there each month and it is no where near $500

Re: Question about 529 plan for college (especially for those in the finance field)

Re: Question about 529 plan for college (especially for those in the finance field)