529 College Savings Plans

I don't know about college savings plans, but be sure your retirement is fully funded. You can finance college; you can't finance retirement/old age.

A lot of this depends on the family, what they believe for children as far as providing college education and of course, retirement also takes a front seat while saving for college.

If you are not numbers oriented and know what is going on with the markets, different investment options, (bonds, numismatics, real estate, etc) , I suggest you get a financial planner that you trust who will explain things to you. We are both very numbers oriented and we still have a planner to keep us on track because it is important to keep emotions out of investing.

There are many ways to fund college. You have the 529's which are great as well as other great options. If by chance your child does not use all the funds of a 529, this money can be used for your grandchildren as well.... SO... you get the next generation started! Make sure you are diversified and all the money is not in 1 place.

We are firm believers that it is our parental obligation to get our daughter out of college debt free so she starts out with a clean slate. I am not one of the popular people here as far as college funding due to my ideas. Some children do not appreciate college at all if it is given to them and they don't excel. A lot of it depends on the child you have raised and what his/her ethic is pertaining to education, goals, etc. My hubby and I have always been strong proponents of higher education and college has never even been a second thought in our daughter's mind. She was planning college around her AP courses since 9th grade.

That said.... we started saving before our daughter was born. After she was born we set up some things directly in her name that is specifically for college. Our goal was a minimum of $10,000 per year some how, some way. Some years there was more if we had a great year, etc. YES, this requires delayed gratification on some other things to get this done but we strongly feel it is our job as parents.

Yes, we fully funded our retirement and continue to fund it regularly.

As for how much? It depends on your personal finances.. Of course do NOT go into debt funding a college or retirement account. That defeats the purpose. Find a number that works with YOUR budget and for YOUR family and go for it. ANYTHING you can afford to do now helps in the long run. Bottom line, you are trying to do something and that is to be appreciated... So many parents just leave their children up in the air to find financing and then those children come out of school with loads of debt. They are screwed before they get a chance to get started!

Our daughter graduated High School this June. Our anticipated amount to get her out of college debt free and possibly toward the MBA is $250,000. She is going to attend SMU in Dallas and hopes to be accepted into the SMU Cox School of Business when she is qualified by her Junior year.

I do not know the ages of your children but I do agree that the whole college thing could be completely different years from now. We are in the midst of the now so I am speaking from the point of view we've had for over 20 yrs.

Best wishes to you and KUDOS to you for thinking and planning for your children.

We're doing $250/child. Even at that, we won't be able to afford four years of state university here in California because the fees have been going up astronomically each year.

There are calculators that will tell you how much you should save for plans to attend specific schools. I try to avoid those because it just isn't realistic. Fr a state school, the last calculator I used, for instance, told me we'd need to save between 600-800 a month per kid. No way am I doing that! We max out our retirement, HSA accounts, etc. and then we put 120 a month per kid in 529s. Next year, when my student loans are finally paid off!, we will add 100 a month per account.

Check this out: http://www.popecenter.org/commentaries/article.html?id=2831

I don't think we will have any clue as to what college will be like in 15 years. It will not keep on as it is, and with online free classes from ivy leagues, who knows, maybe you won't need a college degree. There is no way I'm putting giant sums of money into such accounts. Instead, we put 5k in Roth IRAs every year. You can pull out contributions without penalty for anything you want. This way, we have money for retirement or for college, or for whatever.

What is reasonable is going to depend on your budget.

You need to talk to a financial planner to figure this out. There are too many variable for us to do it for you. Things the planner will need to know:
1)How old are your kids (the younger they are, the more time the $ has to grow)
2) What is the lifetime rate of return on the 529 investments you chose
3) Are you planning for public or private school
4) How many kids do you have
5) What other savings/investment accounts do you have

All of these affect how much you need. For us, I work for a university so free tuition for my kids. To cover just the fees, room, and board, our planner said we needed to invest $6,000 for each kid into a 529 before our oldest was 10 years old to have enough just to cover non-tuition costs for both kids. Obviously that number is much much higher if you don't work for a university.

I agree that retirement needs to come first. We bumped up our savings plan for our oldest son's college fund last year because we realized college tuition had gone up so much. Now we're saving $500/month just for his college fund. He's a sophomore in high school now. For our youngest, we're saving very little because our house will be paid off before he graduates, so our house payment will become his college fund.

I was actually told by my financial advisor to set up a Roth IRA instead of a 529 plan. The 529s can have a lot of restrictions. If your kids don't go to college for some reason, that money will be very difficult to get to. With a Roth IRA there is a lot more flexibility. Talk to a financial planner to see what is best for your family.