college savings

posted 2 weeks ago in Finances
Post # 16
Member
775 posts
Busy bee

LilliV :  I’m pregnant with our 2nd and we have a 529 for our 1st (who will be 2.5 when the baby is born). My plan is to keep all the money in one 529 plan and then split them into two separate accounts (if needed). It’s too much of a hassle for us to figure out contributions for two right now. We also do a dependent care FSA and basically contribute that lump sum yearly. Once we have 2 in daycare we’ll probably only be able to contribute half of the total but it’ll still be a decent lump sum yearly (we’re expecting to have to cash flow some of the college expenses).

Post # 17
Member
1217 posts
Bumble bee

Each child should have an equal amount to spend on their studies. That’s only fair. Definitely do your best to keep the accounts even and consistent– what if something were to happen to you and your H? You’d want them both to have the same amount saved up, as beneficiaries of their accounts. 

I’d contribute to your youngest’s account until it catches up, and then split it 50/50 from there on out. 

Post # 18
Member
433 posts
Helper bee

 futuremrsmoore :  

it took me a moment to figure out what you were saying, but you’re right! Yes, daughter #1 will have the 3-year head start on daughter #2, but she will also be going to college three years sooner. So if you put in the same amount of money as you always did for #1 into #2’s account, they will have the same amount at the same ages.

If you even them out now, #2 will have an extra three years saved up when she goes to college, totally defeating your purposes to make it even Steven.

Post # 21
Member
994 posts
Busy bee
  • Wedding: August 2019 - City, State

I would aim for a set goal number and not go over that threshold, evening the accounts out at the end. For example, if you plan to put $50k into each account over the life of the plan (idk if 529s have a stock component), then do the math:

$50,000/18 years = $2,777 annually/12 months = $231/month per child. 

When the first child gets to $50k (or whatever your limit might be) stop contributing and focus on bringing child #2 up to the threshold. That way, regardless of the amounts of contributions by others, you won’t have to keep playing catch up. If an aunt gives to one child for their birthday and the other gets a toy, etc. It could be a lifetime headache for you. 

Post # 23
Member
994 posts
Busy bee
  • Wedding: August 2019 - City, State

LilliV :  That’s great! My IRA is in a Vanguard 2050 and it is nice to have them figure themselves out. 

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