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100k per bean for college

February 11th, 2009 at 10:12 am

I used the Bankrate calculator to figure out how much we'd need to save to meet my hubby's goal to have 100,000 saved for each bean for college. Assuming a conservative 2 percent return each year, it works out to $385 a month for 18 years.

That's not as bad as I thought it would be. It's totally doable. And, if we had another, we'd still probably be OK, especially if I went to work even part time (plus freelancing).

I know it seems exorbitant, but my hubby's top-rated financial goal at the moment is to pay for his kids' college 100 percent, like his parents did for him, so we can give them a clean slate in adult life.

13 Responses to “100k per bean for college”

  1. kdmoffett25 Says:

    Seriously, call Vanguard and see what they can suggest. My mom and dad only wanted $25K for each grandchild, plus 3 kids, which is 9 accounts. They deposited $500-1000 each year and each grandchild has ended with a little more than $25K. If you are willing to deposit that much, I would call them. I know it is not a 529, but it is like a ROTH were only the interest is taxable when withdrawn. Plus, if the beans get scholarships, they can choose to use it for a house down payment or save it for retirement. I personally would not tell them until they needed it so they wouldn't ask for any unless absolutely needed.

  2. monkeymama Says:

    I tried to make a lot of points in my last comment, but this was definitely one of them. I don't see why you can't do both (college and tiki). In your case, $100k is VERY doable. So it sounds like a plan!

    I have to second not to put it all in a 529. Just because it is your husband's dream doesn't mean it's your kid's dream, that it is best for them, or that they can't get scholarships. I think it is way more likely than he realizes that you won't need it all. I won't knock his choice to save it (& to prepare for his dream). But he could regret saving $200k in 529s if a large chunk can not be used for college. Just keep that in mind. I would fund the 529s now, where they will grow tax free indefinitely. Later on I would invest in other venues. Tax law will change anyway, etc.

  3. Analise Says:

    $100,000 may not be enough for 4-5 years of college 18 years from now. I read that in 18 years, it is estimated that a private college education will cost > $200,000 and at a public college, > $100,000. Here is the article if you are interested. It does give ideas for planning and saving, so that you can make it happen.

  4. thriftorama Says:

    Analise--We figure 100k would be a good start. We don't believe it will cover everything, at least not if tuition keeps going up the way it is.

    To everyone else. I plan to put the max $2,000 a year into the 529 and find another account to put the rest in. We are limited as to how much we can put in a Roth every year, so any other suggestions are welcome.

    KD-- do you know what type of account your parents have at Vanguard? Is it a Roth, a regular brokerage or something else?

  5. whitestripe Says:

    wow. fees are very different in the states compared to australia.
    here i estimated for a law degree at university it would cost me around $35k in tuition. a psychology degree would be around $20k or less.

  6. Phenomenal Woman Says:

    Whitestripe - I pay a little less than 25k for 4 years for an Occupational Therapist degree and in the Business degree.

    But I go to state colleges. It is not nearly as expensive as Ivy League schools.

  7. thriftorama Says:

    We have to figure that the costs will go up astronomically even for state schools in the next 18 years, unless there is an overhaul of the education system.

  8. North Georgia Gal Says:

    I read an article the other day about financial aid and grants. It said that if you put the money into an IRA instead of a 529, it can not be looked out to determine grants. I don't remember the specifics, but you might want to look into that.

  9. my english castle Says:

    Good luck to you on your funding the 529. My DD's 529 is now worth 10% less than we've deposited in it. Boohoo!

  10. Joan.of.the.Arch Says:

    A private school does not have to be Ivy League to be expensive. My alma mater's tuition is set at $37,800 for the 2009-10 school year. Uhm, I promoted state schools for my own child.

  11. baselle Says:

    But a deeper question: if your DH life's goal is just funding for college (not even his retirement?!), and you have a dream other than that, it seems like there are bigger issues.

  12. kdmoffett25 Says:

    Thrift,

    I think it is like a regular brokerage account, but everything is in bonds, so it is more stable. I know that Lizard, my 14 yr old, has enough now where they don't make any deposits and she will have more than the $25K at the age of 18. Online, it says my account is the following type: Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares. The fund type is 0042, but that probably means something to Vanguard.

  13. thriftorama Says:

    Thanks KD

    Baselle: It's not our only goal. We fully fund all retirement accounts. Some years we sock away more than $30k for retirement. Our house is also paid off, and we have a decent emergency fund. College is the only big expense we have left to save for. And since we are new at this whole parent thing, it's forefront in our minds.

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