Personal Finance (Not Investing) • How much is enough in a 529 account?

This is just a math problem. Use the "PMT" function on a spreadsheet or financial calculator. Choose some sort of reasonable assumption (5% real returns?) and the number of years you have until college and the amount you have now and plug it all in. For example, let's say you need $30K in today's dollars, you assume 5% real returns, and you have $4K now and the kid is 2 (so 16 years left). The function looks like this:

=PMT(5%,16,-4000,30000 = $899 a year ($75 a month) you need to put into this account

If you have nothing now, it's =PMT(5%,16,0,30000) = $1,168 or $97 a month. Round it off to $100 a month and that should get you in the ballpark assuming education inflation is similar to overall inflation.

Hope that helps.

Statistics: Posted by Grt2bOutdoors — Sat Jul 27, 2024 11:27 am — Replies 25 — Views 2118