Fair enough. I'm in a similar boat in terms of demographics, just a different view / situation. I'm of the view why bother if I don't anticipate an impactful tax savings, if any at all. I think we'll both be fine Image may be NSFW.
I tend to view all 529/college savings related threads, as one of the few areas where I personally have some uncertainty in our investments. There have certainly been a few, but I really haven't noticed "many" posters concerned that they had over-funded 529s and had no idea what to do with the excess contributions. Anecdotally, I would say more posters on Bogleheads are disincentives to contribute to 529s due to fear of their over-contributed investment gains being locked away behind a scary 10% penalty that they are willing to pay more in capital gains taxes and tax drag on taxable accounts.
There is certainly a component of luck involved here. OP and I share some advantages in having high income and multiple kids. My spouse and I (and I would wager OP) are also highly educated and from families that highly valued education, making it more likely that our kids will attend college in the first place. The full "qualified expense" sticker prices of my and my spouse's educations today would come to $1.25M, so I'm not overly worried that we or OP are over-funded to a crazy, irresponsible degree.
Clik here to view.
To clarify, it's a 10% penalty + ordinary income taxes, right? That could be much more substantial than dividend tax drag.
Also, what about scholarships - the 10% penalty is waived, but you still owe income taxes on the earning, right? Seems like taxable would come out ahead for most(?) situations if that is the case.
Statistics: Posted by ThankYouJack — Thu Jul 18, 2024 3:37 pm
