Our kids are 8 and 10. We live in Florida where we have no state income tax. In-state tuition including books, supplies and room and board is about 20k annually today. Florida has a program called Brightfutures for those that qualify academically.
We save for both of them in the Utah 529 using the target enrollment fund. The current balances for my 8 and 10 year old are 43k and 61k respectively. We are investing 300 dollars monthly in my 8 year old 529 and 160 per month in my 10 year olds. We are targeting saving towards the cost of in state tuition including books and housing.
My wife and I max both our 401k and backdoor Roth IRA. We also save 1k a month in taxable. Using the vanguard calculator (assuming 6 percent return and 5 percent tuition increase), without any more contributions to 529 our 8 and 10 year old are 61 percent and 88 percent funded.
I am considering stopping future contributions to 529 and increasing taxable contributions by 460 per month. For any college expenses the 529 does not cover, we will make up the shortfall from taxable and cash flow. I like the tax benefits of the 529 but taxable is more flexible.
Is there anything wrong with this approach?
We save for both of them in the Utah 529 using the target enrollment fund. The current balances for my 8 and 10 year old are 43k and 61k respectively. We are investing 300 dollars monthly in my 8 year old 529 and 160 per month in my 10 year olds. We are targeting saving towards the cost of in state tuition including books and housing.
My wife and I max both our 401k and backdoor Roth IRA. We also save 1k a month in taxable. Using the vanguard calculator (assuming 6 percent return and 5 percent tuition increase), without any more contributions to 529 our 8 and 10 year old are 61 percent and 88 percent funded.
I am considering stopping future contributions to 529 and increasing taxable contributions by 460 per month. For any college expenses the 529 does not cover, we will make up the shortfall from taxable and cash flow. I like the tax benefits of the 529 but taxable is more flexible.
Is there anything wrong with this approach?
Statistics: Posted by GratefulDad — Sun Dec 15, 2024 7:22 am — Replies 6 — Views 369