I don't have kids that are high school or college age yet, but they are part way there (still in preschool years). I decided to set aside some money in 529s to pay for college. I'm planning on having the parents (me and my wife) pay 75% of the cost and the remaining 25% my kids will be on the hook for, through scholarships, summer jobs, or potentially loans if they don't want to work or get scholarships.
Back when each kid was born, I invested a sum of money that was equal to about 45% of the total 4 year cost of college for 4 random in state colleges near the state that I live in. I have not contributed to it since. Today the 529 for my oldest kid is worth about 75% of the current 4 year cost and the 529 for my youngest is worth about 55% of the current 4 year cost. They investments have done well because the stock marked has risen handsomely as we came out of the 2007 recession while the cost of college has been relatively flat in my neck of the woods.
They still have around 15 years to go, and if my investments go up at the historical average (8%) and the cost of college rises as historical average, I think there will be enough to pay for 75% of each child's college education. I might have to move some money from dd #1 to dd #2's account but the 529 rules allow for transfers relatively easily.
My goal is to not drop another penny into the accounts in the next 15 years and be able to pay for our parent share.
Parents of current high school students, how does this plan sound to you?
↧
