How Much Should I Save in 529’s?

June 09, 2020
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One question we hear a lot is “How much should I save for my child’s/grandchild’s college?”


The answer depends on whether you are working toward retirement or are already in retirement.


If you are still working, as a general rule of thumb, we are going to suggest that before you make any contributions toward college, you are taking care of yourself. That means you:

(1) have no debt besides your mortgage

(2) have an adequate emergency fund of at least 3 months of expenses

(3) are saving 10-15% of income toward your own retirement


If you have taken care of those three items and are pleased with the path you are on, the answer is the smaller of “as much as they need” and “as much as you can afford.”


If you are retired, we suggest you stay in the withdrawal guidelines outlined by your financial advisor. For example, if you have $1,000,000 and are advised to take only $45,000/year, again save the smaller of “as much as they need” and “as much as you can afford” from your suggested allotment.



Disclaimer: Alex Voorhees and Reston Wealth Management do not provide legal, accounting or tax advice. This information is not intended to be a substitute for specific individualized investment, tax or legal advice. We suggest that you discuss your specific situation with a qualified investment, tax or legal advisor. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or strategies may be appropriate for you, consult your financial advisor prior to investing. No strategy assures success or protects against loss and past performance does not guarantee future results. You should consider the investment objectives, risks, charges and expenses of any investment carefully before investing. You cannot invest directly in an index.