What is a decent 529 account amount for a high school student who is undecided about what he wants to do?
Fidelity has nice calculator for contribution https://www.fidelity.com/misc/college-savings/college_savings.html
There's not much time before they'd need it so I wouldn't invest at this point if they are unsure if they'll go. If you live in a state where you can save state tax on 529 contributions, I'd just max that out each year they are in college and then pay from there.
Unused amount up-to 30k can be converted to roth ira for the kids. If you are able to do that it would be a very nice gift. Tax free growth and can be tapped into for downpayment on a property when they are ready to settle down
I’m in CA, I’m investing via Vanguard. Is this good or there are better alternatives where people are investing and happy? My rate of return is terrible but maybe it’s just the market? My current fund is TargtEnrol 2040/2041 Port
I don't like target funds personally. They tend to be overly bond-heavy.
I have set 90% as Stock within it. Is there a way we can manage the funds whenever we want?
I have put 100k and my kid is 6 year old. I am going to let the compound interest let it increase from here on.
529s don’t make sense to me for most parents. There are so many other accounts to max out (401k with backdoor, IRA, HSA). Grandparents and very high income I think makes more sense… and people who lack discipline and would waste it so need a dedicated no-touchy account.
Can you explain more behind the reasoning of 529 not being worth it compared to maxing out those other accounts?
401k, HSA, etc give you tax breaks up front, plus employer match in many cases. 529 only shelter gains from tax (like most of those other accounts anyway) and are more restricted as to usage and investing options.
100k is a good average target. Your bigger problem is convincing your kid to go to college rather than a blue collar route. If they don’t know, give them a gap year to work and travel a bit. Hopefully that’ll help figure things out when they see all their friends finishing their first year of college.
Whatever you can afford, but not more than 500k
What % of people need 500k for college? I only budgeted 100k, is it too low?
It depend. In-state you can finish 4 year degree 120K give or take. Out of state 350-450K depending on college including Dorm and food