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Message
Son graduating - should I cash out his 529?
Posted on 1/16/25 at 9:47 am
Posted on 1/16/25 at 9:47 am
Son graduating LSU this year. I'll have almost $40,000 leftover in his 529 after he finishes. Is there any reason not to cash this out? I did think about holding on to it in case he decides to go back to school for a masters or something, but this seems unlikely. Could I sit on it and switch it over to a (currently nonexistent) grandchild in the future?
7
Posted on 1/16/25 at 9:51 am to dcw7g
New rules allow you to roll it into a Roth IRA up to 35,000. Still have to abide by the yearly contribution limits though. That would be a great start to his retirement.
Info on 529 to roth
Info on 529 to roth
This post was edited on 1/16/25 at 9:54 am
Posted on 1/16/25 at 11:54 am to dcw7g
Without getting too personal, how much did you set aside for him? It sounds like you over budgeted or the growth was higher than anticipated.
My daughter is 9 and I haven’t saved a penny, but have some money just laying around that I wanted to catch up with. Needing to know what to anticipate so I can factor in 9 more years before she hits college.
My daughter is 9 and I haven’t saved a penny, but have some money just laying around that I wanted to catch up with. Needing to know what to anticipate so I can factor in 9 more years before she hits college.
Posted on 1/16/25 at 12:01 pm to CHiPs25
For a 9 year old, I would plan to spend at least 100k a year for college.
Posted on 1/16/25 at 12:06 pm to CHiPs25
quote:
It sounds like you over budgeted or the growth was higher than anticipated.
My daughter is 9 and I haven’t saved a penny
Sounds like you under budgeted
Posted on 1/16/25 at 12:07 pm to BigApple
quote:
I would plan to spend at least 100k a year for college.
WTF?
In-state schools are around $20,000-$30,000 a year currently, they are not going to 3x-4x increase in the next 9 years. Anyone paying out of pocket for out-of-state tuition or private college are financial morons. If your kid cannot get a scholarship to waive OOS tuition or private tuition, they do not deserve to go to college.
Examples -
Ole Miss
LSU
This post was edited on 1/16/25 at 12:12 pm
Posted on 1/16/25 at 12:10 pm to BigApple
quote:
For a 9 year old, I would plan to spend at least 100k a year for college.
IMO, 400K for a 4yr degree won't be worth it in 10yrs.
Everything is moving to certifications over degrees. Unless you are going into a very specific, specialized industry (Medical, Legal) it just won't be worth it.
Posted on 1/16/25 at 12:29 pm to Lsut81
Ya I saw some forecast for our kids and the math wasn't mathing.
I'm not much of a prognosticator but it would seem no one would actually be paying those prices if they came to fruition, so either the price would be lower in reality or via scholarship offers.
I'm not much of a prognosticator but it would seem no one would actually be paying those prices if they came to fruition, so either the price would be lower in reality or via scholarship offers.
Posted on 1/16/25 at 12:56 pm to BigApple
quote:
For a 9 year old, I would plan to spend at least 100k a year for college.
I'll assume this is a joke
Posted on 1/16/25 at 1:00 pm to Lsut81
quote:
IMO, 400K for a 4yr degree won't be worth it in 10yrs.
Everything is moving to certifications over degrees. Unless you are going into a very specific, specialized industry (Medical, Legal) it just won't be worth it.
Yup. The trend is clear.
Posted on 1/16/25 at 1:01 pm to dcw7g
If you don’t need the money, allowing your child to fund a Roth IRA with it would be a huge leg up in starting their retirement savings.
Posted on 1/16/25 at 1:04 pm to TunaTigers
quote:
New rules allow you to roll it into a Roth IRA up to 35,000. Still have to abide by the yearly contribution limits though. That would be a great start to his retirement.
Because of the changes, I'm about to set up a 529 with my wife as beneficiary and she'll set a 529 with me as the beneficiary. We currently don't have kids. If we have kids, we transfer the beneficiary and it's all good. If we end up not having kids, we'll do the roll-over. If there's any excess funds, we can take some classes or something.
$3,000 contributions for the first three years @ 8% annual returns gets us $25,000 after 15 years
$3,000 contributions for the first for three years @ 10% annual returns gets us $35,000 after 15 years
Posted on 1/16/25 at 2:48 pm to dcw7g
My dad did not use my 529b, I now have kids. I can't remember the specifics but we were able to make me the account owner, set up 529b for kids and each year use gift allowance to move money to kids 529b accounts.
Posted on 1/16/25 at 3:56 pm to DarthRebel
With 2 kids under 5, these numbers make me 
.
I have a great start saving but I guess I need to take a graveyard shift at the circleK now.
. I have a great start saving but I guess I need to take a graveyard shift at the circleK now.
Posted on 1/16/25 at 6:41 pm to dcw7g
We had money left after our boys graduated, but not near that much, $6k I think. We left it alone and are saving it if/when we have grandkids down the road. Going to let it compound and by the time they're ready for school, there will be a nice nest egg for them. If you need the money, you can take the 10% hit by withdrawing it.
Posted on 1/16/25 at 6:46 pm to BigApple
lol
My daughter graduates from LSU in May. She has TOPS and I pay about $2500 a semester for tuition.
My daughter graduates from LSU in May. She has TOPS and I pay about $2500 a semester for tuition.
Posted on 1/16/25 at 7:12 pm to TunaTigers
quote:
New rules allow you to roll it into a Roth IRA up to 35,000. Still have to abide by the yearly contribution limits though. That would be a great start to his retirement.
Also, any moneys transferred to Roth need to have been in the 529 for 15 years.
Posted on 1/16/25 at 7:25 pm to BigApple
quote:
For a 9 year old, I would plan to spend at least 100k a year for college.
100K/year?? Guess I need to tell my 9 year old he won’t be getting a college education. Maybe just drop him off at the trade school tomorrow morning so he’ll have a leg up.
Posted on 1/16/25 at 8:24 pm to makersmark1
quote:
Also, any moneys transferred to Roth need to have been in the 529 for 15 years.
Didn't know that part. That kind of sucks.
Posted on 1/16/25 at 9:13 pm to dcw7g
quote:
I'll have almost $40,000 leftover in his 529 after he finishes. Is there any reason not to cash this out?
There's a big reason not to cash that out. Please look into the roth conversion option
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