College Savings
How do you determine the right amount to contribute to a 529? Is it best to invest only to a certain max and keep other allocated funds elsewhere in the event the funds are not needed for college? And with cost discrepancies between different colleges, how do you set a savings goal? Now that our kids are teens we are looking more closely at what to do in the next few years.
Terry Says
Very rarely do people have “too much” saved for college — unless their child gets a complete scholarship! And remember, money can be used for other children in the family, so if one gets a scholarship or goes to a less expensive school, the other children might need the funds.
That said, you can go to each college’s website to see the COA — total cost of attendance. If you haven’t looked in a while, it might be shocking. And that doesn’t include the cost of travel to and from school!
So keep saving. And remember, if there are extra funds in the account, when the graduate goes to work he/she can gradually convert and contribute the excess — up to $35,000– to a Roth IRA in his own name.
