Where does the time go? It seems like just yesterday that they were learning to walk, and now my kids are graduating from college?!?

My socials are full of prom and graduation pictures, which means it’s time to talk about how you get money out of the 529 plan to which you’ve been diligently (or otherwise) contributing.

A client’s former advisor told her that she should save $800,000 per child for college. None of my initial reactions to that were appropriate for a client meeting, but how much should you save for college is an important question for a lot of families so let’s dig into that.

Should you find yourself in the fortunate situation of having more 529 dollars available than needed, there are several things you can spend those dollars on that you might not have thought of:

If you’re a financial advisor, it’s hard to go an hour without talking about I Bonds right now. It seems the word is getting out to the general public now too.

A recent survey showed that while almost two-thirds of parents were saving for college, only about one-third are saving in a 529 plan. That’s unfortunate, since 529s are usually the best choice for savings, for a lot of reasons. On the other hand, it’s not unexpected, given that the vast array of often confusing choices can be a barrier to use. So, how do you choose?

A contribution to your child’s 529 account is, according to the IRS, a gift to your child. This means that it’s subject to annual gift limits: any individual can gift another individual $15,000 in 2021 without reporting it anywhere or paying any taxes on it. In 2022, the limit– or exclusion amount– goes up to $16,000.

Tis the season to put your money where your mouth is. Ways to shift from your kids getting stuff to encouraging family and friends to contribute to your 529 savings plan.

How much can you contribute and how much should you contribute?

It’s back-to-basics week for me and time to talk about getting started saving for college. If you want your children to go to college, you need to save. Period. That’s the easy part. Harder is where and how much.