Great news!
Good luck with your search.
That is almost enough to full pay 4 years of undergraduate at an expensive college…
However, you may still want to use caution with college costs, because:
- If you are planning to go to graduate school other than a funded PhD program, that can be expensive, so you want to save some money for that.
- Spending less will leave a margin of safety against unexpected financial setbacks.
- Also, it is desirable to leave a margin of safety against possible investment losses.
- It may be a good gesture of appreciation to your parents to spend the money carefully, not recklessly.
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@ucbalumnus you’re absolutely correct! I plan to stick to the schools I’ve been exploring.
@MYOS1634 My dad wants me to have all the advantages he couldn’t have growing up. We’re INCREDIBLY close, despite our differences.
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I’d take a look at Ft Lewis - a CO public WUE school in Durango. Beautiful campus, beautiful and fun to visit town. About 3500 students so it feels private they have a ski lift on-campus and from campus access to hundreds of miles of mtn biking/hiking trails. A 3.4 should do the trick.
Enjoy the search and good luck.
@NCalRent that’s a bit small for me. I’m also not really an outdoorsy person. Thanks for the idea anyway.
You could look at groups of schools, such as other Jesuit schools similar to Xavier: Gonzaga, Seattle U, Creighton, Marquette, University of Portland, U of SF. Some of these may come in at your budget with merit aid. What about Boise State (as a WUE school). Some of the PNW liberal arts schools may work for you: Lewis and Clark, Willamette, U of Puget Sound. Someone else suggested WWU in Bellingham, which is such a nice little city.
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Then why is he limiting your undergrad cost to $25,000 a year? That 529 must be used for educational purposes without penalty. You are an only child.
If you only spend $100,000 on undergrad school, where will the remaining money go?
From what I have read, if all the money is not used is not used for college, the earnings portion of the 529 is subject to income tax and also a 10% penalty once it is withdrawn from the 529.
I know that @MMRose . wondering if the OPs dad knows this!
@thumper1 I don’t think he does TBH. I hope he’s able to meet with his advisor about this. If he doesn’t have one, he obviously NEEDS one. Based on what you guys have said, that cap can come off. In case you didn’t know, I aspire to a Masters (Sociology or International Studies) so I bet I’ll use up the 529.
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Exactly!
@barbthewarrior you should probably print out some webpages on the rules for 529 plan distributions and show them to your parents. For one thing, if it already has more than enough, he might want to stop contributing as of now. He also might need financial advice as to how to differentiate the amount he contributed vs the earnings portion
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@thumper1 – Also, sorry that the original post was a reply to you and not to the thread as a whole!
It’s good to be an only child! Your parents have saved enough that you can go to any school in the country that you would like to attend.
Keep in mind that you may want to go to grad school, too, so if you can get merit money somewhere, that would spare some of the fund for grad school. Also, if you have money left over, it can be left to grow tax-free for your own kids to use.
But you can go to any school you can get into! Yay, Mom and Dad!
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@parentologist yes, I DO aspire to graduate school! Nice to know my future kids can inherit leftover funds. Why should he stop contributing?
It’s a tax break for them. So if he is willing and able, it’s a good thing for them to take advantage of, the same as an IRA or Roth IRA of SEP-IRA. So unless they need the money for something else, they should keep contributing to it.
The reason he was so surprised by the balance is because he wasn’t paying much attention to it lately (Covid has him distracted, understandably), plus he’s surprised I’m starting this process so early.
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Well, if there is already enough or more than enough, then he doesn’t face the risk of the penalty or the taxes on the amount you don’t use. Although as was mentioned, it could stay in the 529 for your future kids. But that’s totally a personal decision, of course!
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Can you elaborate on it being a tax break? I hadn’t found information on that.
Thanks!
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Money kept in 529 plans is not subject to yearly federal income taxes on dividends, interest, and realized capital gains, similar to IRA, 401k, 403b type of accounts. This can be a significant tax advantage if the money is invested for many years in investments that produce significant dividends, interest, and/or realized capital gains that would be subject to yearly federal income taxes.
Ok, thanks. I was thinking you were talking about it being a deduction in the year it was contributed.