If you don't get the golden Natty Lite can, what's your college savings plan

[Fijimn]

We had 2017 review and 2018 projection with our financial advisor. He suggested I had too much going into the 529 and advised to try to fund only 75% of expected tuition need - the remaining can be funded with cash flow. The risk of being overfunded (considering the low rate of return and penalty for non-educational use) outweighed being underfunded -- if you project that you'll have sufficient cash reserves or flow to cover the unfunded costs.

That got me looking at the Texas plans. I can get into a plan where I basically buy 4 years of tuition and fees at today's prices (a reverse 529) - that seems to be a better strategy.

A corollary, has anyone done a backdoor roth IRA? Which brokerage/plan did you use?

 

[OrlandNole]

We opted into the Florida Pre-paid plan. It's a hedge against tuition increase and allowed us to maintain in-state status for tuition even after we moved to Tennessee.

 

[Fijimn]

Similar, I believe, to what we have in Texas. I'm thinking that is a better route than a straight 529 account.

 

[seminoledq]

We contribute to 529 accounts but have nowhere near enough to cover the cost, or even 75% of it for that matter. After that it's fingers crossed for scholarships then take out loans for the balance.

 

[Formerly Rockymtnole]

We've funded each of their 529 plans with some assumptions about expected return until they will need the funds. They're different ages so the current balances vary. Had to do some catch up with the oldest.

By 75% of the tuition you mean he's advising you to not try to fund non-tuition qualified expenses like room and board, books, etc?

 

[Fijimn]

We've funded each of their 529 plans with some assumptions about expected return until they will need the funds. They're different ages so the current balances vary. Had to do some catch up with the oldest.

By 75% of the tuition you mean he's advising you to not try to fund non-tuition qualified expenses like room and board, books, etc?

Correct. He had cautioned against overfunding the 529.

 

[Formerly Rockymtnole]

Yeah, who knows what's best. I think my wife said if the kids get scholarships you can withdraw that amount without penalty, and leftovers can be transferred to grandkids (when tuition will probably be $10,000 a credit hour...)

 

[Fijimn]

Yeah, who knows what's best. I think my wife said if the kids get scholarships you can withdraw that amount without penalty, and leftovers can be transferred to grandkids (when tuition will probably be $10,000 a credit hour...)

It's a real difficult guessing game. The ROR is not great and the fees seem to be on the high side. The theory being is, when you are dividing up your blueberry pie of earnings into college savings, retirement savings, cash reserves, etc, you really have to look at the distribution because you may be adversely affecting, say, your retirement savings by overfunding the 529 or you are hurting the cash reserves.

 

[EconSean]

You’re all doing it wrong. Have your spouse be a professor, then your kid(s) gets if not a free ride, a greatly discounted one wherever spouse works.

Beyond that, my annual bonuses will cover room and board.

If he wants to go somewhere else, he’s on his own (though I think my wife’s institution has arrangements with other schools to cover tuition).

This is our plan, at least.

 

[itsjustme0770]

My son's 529 plan is up almost 20% this year. Not sure where you are investing, but you can get good returns. Even if your child doesn't use it all, you can use it later in life for yourself. Lots of educational funding opportunities. I wouldn't be too worried about overfunding it.

 

[TexSkills]

We're doing Florida Pre Paid. Made sense and everyone we talked to about it recommended it.