4 ms·

I would imagine the price for college exceeds $150,000 in many cases. I have a savings target well in excess of that for my son.

an_opabinia 6y ago
I mean this in the best possible way, try punching "529 Plan" into Google. The point of the comment, which I'm not sure why it was being downvoted, is why something might sound newsworthy (14 college funds?) when it really has a simple, logical explanation if you're sophisticated with money. And in the same breath, in applause of a guy performing a tax optimization, the original poster shits on the state - did it create this tax loophole? Do you think the people running government want college to be expensive? Rich people, really everyone with heritable wealth, love the 529 plan. If you understood that it is used to create multi-purpose, heritable investment accounts tax-free in vast excess of the actual cost of tuition - that anyone who would have a hard time paying Harvard's tuition goes for free anyway - you would detect some insincerity in "14 college funds" too! And maybe consider that this 529 plan remains the status quo, this total tax dodge, because of people who have this romanticized picture of it being used to pay expensive college tuitions. We're talking about a family so sophisticated that it's probably going to change legal guardians on those very same children in order to benefit from free tuition anyway. It's a great story. We certainly want our brainiacs spending resources "hacking" some shitty institution like the lottery. On the other hand, you think he doesn't take beyond his measure from the government too?
Communitivity 6y ago
The 529 plan, specifically the prepaid tuition plan, is an amazing option here. Another user has already pointed this out, but I want to add personal direct experience. We used the 529 plan for our daughter, who will go to college in a few years. Let's say 5 for the purpose of the math. At this year's price her 4 years of college tuition will cost her ~ $48k. This total expected to go up around $10k every year before she gets to college (around $2k annual tuition rise, over 5 years). So if we paid her tuition when she went in five years, we would pay $20k, $22k, $24k, $26k, for a total of $92k. Instead we pay $50k now, and are guaranteed to not have to pay any additional tuition costs, for a savings of $42k. The tax deferment might be another $8k (spitballing). Which means the using a 529 plan now you can send two kids to college in 5 years for the price of sending one to college in 5 years and paying for it then. Yes, there are risks. * They may want to go to a private school, or out of state. The money isn't lost, but you don't get the guarantee either. You just get the money applied to the tuition. * Tuition prices may come down and stay down. They haven't yet, and it seems unlikely without major upset. They might come down over the next year, but I suspect they'll go back up. * Universities may become free, or become extinct in their current form. With any forward-looking investment there is a risk of a true disruption that completely changes the landscape. This would be such a huge change that it's not likely to completely happen within the 9 years until she would graduate, if it happens at all.

an_opabinia 6y ago

I mean this in the best possible way, try punching "529 Plan" into Google. The point of the comment, which I'm not sure why it was being downvoted, is why something might sound newsworthy (14 college funds?) when it really has a simple, logical explanation if you're sophisticated with money. And in the same breath, in applause of a guy performing a tax optimization, the original poster shits on the state - did it create this tax loophole? Do you think the people running government want college to be expensive? Rich people, really everyone with heritable wealth, love the 529 plan. If you understood that it is used to create multi-purpose, heritable investment accounts tax-free in vast excess of the actual cost of tuition - that anyone who would have a hard time paying Harvard's tuition goes for free anyway - you would detect some insincerity in "14 college funds" too! And maybe consider that this 529 plan remains the status quo, this total tax dodge, because of people who have this romanticized picture of it being used to pay expensive college tuitions. We're talking about a family so sophisticated that it's probably going to change legal guardians on those very same children in order to benefit from free tuition anyway. It's a great story. We certainly want our brainiacs spending resources "hacking" some shitty institution like the lottery. On the other hand, you think he doesn't take beyond his measure from the government too?

Communitivity 6y ago

The 529 plan, specifically the prepaid tuition plan, is an amazing option here. Another user has already pointed this out, but I want to add personal direct experience. We used the 529 plan for our daughter, who will go to college in a few years. Let's say 5 for the purpose of the math. At this year's price her 4 years of college tuition will cost her ~ $48k. This total expected to go up around $10k every year before she gets to college (around $2k annual tuition rise, over 5 years). So if we paid her tuition when she went in five years, we would pay $20k, $22k, $24k, $26k, for a total of $92k. Instead we pay $50k now, and are guaranteed to not have to pay any additional tuition costs, for a savings of $42k. The tax deferment might be another $8k (spitballing). Which means the using a 529 plan now you can send two kids to college in 5 years for the price of sending one to college in 5 years and paying for it then. Yes, there are risks. * They may want to go to a private school, or out of state. The money isn't lost, but you don't get the guarantee either. You just get the money applied to the tuition. * Tuition prices may come down and stay down. They haven't yet, and it seems unlikely without major upset. They might come down over the next year, but I suspect they'll go back up. * Universities may become free, or become extinct in their current form. With any forward-looking investment there is a risk of a true disruption that completely changes the landscape. This would be such a huge change that it's not likely to completely happen within the 9 years until she would graduate, if it happens at all.