I've got 529s for our two kids. They are funded to a point that at my current monthly contribution should have the 529 balances around $100k for each kid when it is time for college (4-6 years away). Does it make sense to decrease or stop contributing to the 529 and start saving the money in a separate after tax brokerage? I'm thinking that protects me if one kid gets scholarships, goes to a trade school, or doesn't go to college.

I would hate to have money stuck in a 529. Thoughts?

I can see your thought process. Congratulations on piling up the funds for their college expenses. As you dwell on this, remember you can change beneficiaries on the 529s. Should one child decide not to go to college or goes to a trade school for two years, you can move the unused funds to the one who does go to college, or to another family member, like a grandchild. You may already know this but thought I would mention it just in case.

I wish I would have stopped earlier on my kids 529. At least the rules have been changed to allow some of the excess to go into my kid's IRA but it will still be over funded even after that is maxed. I likely would have had too much anyway but one child had a solid scholarship and went to a lower cost school.

As the other poster said, it can be assigned to someone else but for me that likely won't be a family member

Quick question. How much is overfunded for Texas A&M 4 year undergrad? 200k or 300k?

As a reference: My 10 year old has 100k in his and I stopped funding it moving forward as of last year to prevent overfunding. It's been 100% in the index.

I would recommend stopping and just invest in normal tax bearing accounts. If you over invest (or it grows), the penalty is pretty bad to get the money out. IMHO you'd be better off under investing in the 529k.

As a point of reference, our current student just paid $8300 in tuition and fees for the fall semester. I think that's 13 credit hours. This includes parking, sports pass, etc. Does not include living, meals, gas, or anything else.

$200-300K to fund state school?

This is a good question and something I've been thinking about as well. I've got a 13 and 10 year old, and I've saved about $140K and $120K for each of their 529's, and I'm currently saving $600/month into each of these. My goal was to have $200K saved for each, or thinking about it as $50K per year for each. Maybe this is too much and a reach, but my thought is to use the flexibility to transfer the 529's to another benificiary (maybe their kids in the future) and/or fund an IRA for them once school is over. If I'm not mistaken, the new rules allow you to transfer $35K from the 529 to a Roth IRA (I could be way wrong on this).

I am thinking about slowing down on the monthly contributions though and moving that money else where into me and my wife's taxable accounts.

If you truly want to fund 100% of all their college expenses in a 529, $100k should get your covered assuming they'll be enrolling soon and at a state school.

A couple reference points: I have 1 kid that just finished college and another going into their sophomore year. Both are at state schools in TX.

Oldest received a partial scholarship. Our total cost at the end of 4 years, including tuition, fees, apartment, and some living expenses was $50,000. We had about $60k in a 529, so it covered everything, and we transferred the balance to one of our other kid's 529 plans.

Current student didn't receive any scholarships. Freshman year ran about $12k per semester for 15 credit hours, books, dorm, meal plan, etc. He's moving to an apartment this school year. Tuition, fees, books for the upcoming fall without dorm and meal plan is about $7k. However, our total cost is still about the same per semester since we'll be paying for his apartment. At the end of 4 years, our total will be about $95k. It could have been less, but the apartment he's moving into is $1k/month. (apartment for older kid ran $500/mo. Different schools in different cities with wildly different apartment rates).

Our philosophy is to pay for everything their freshman year. However, once they move into an apartment, our agreement is that I will pay for school and a place to live, but the rest of their living expenses are on them (food, entertainment, gas, etc). They need to learn fiscal responsibility at some point.

My kids were born in '95 and '97. Started 529's for both just after they were born. The popping of the .com bubble (2001) and the housing bubble (2008) didn't do me any favors. Over 18 years from Jan '98 thru Dec 2015, the S&P just barely doubled in value - about a 4.3% average annual return. (for comparison over the last 18 years the S&P has gone from around 1400 to now 6300 - more than quadrupled).

I did eventually make some money on them, but no where near what I had hoped for. At least it was all pre-tax / tax free money.

Most top tier state schools are running $30k-$35k annually all-in right now if your kid is living in a halfway decent apartment. The figure on financial aid office is garbage.

Halfway decent is defined as somewhere along the same lines of the level of hotel you'd stay in. Someone who's parents accumulated $100k for their college education likely lives in a place that isn't roach infested. They're also likely not eating rice & beans and top ramen.

I've got 3 kids ages 10, 8, 6 and have been trying to figure out where to draw the line as well. I have about 110k in the 10 year olds, 95k in the 8 year olds and 85k in the 6 year olds. Based on the models I've been using, this should be sufficient barring any market collapses so I've stopped contributing to the 529's and just switched the funds into a taxable brokerage account that I'll use to supplement any shortfall that may happen.

Theres more options now than in the past for any unused funds, but I like the idea of more immediate control in the taxable brokerage account than letting it sit in a 529.

First kid will cost me $240K when we are done in two more years (Junior this year) and my second son, who is applying for Texas A&M in the next week or two, and the Aggies are his first and second choice (whoop), will likely cost me ~$105K or there abouts.

It's very dependent upon where they want to go to school - third choice for my second son, is SMU and that would run me $280K for 4 years. God please let him be an Aggie.

We saved $200K for each kid, so I will be writing a check next year to cover the $40K shortfall of my first son.