529 Plan


I have two 529's setup for my kids. I have enough for 6-7 years of college and was planning on taking the last 1-2 years out of savings, instead of putting more into the 529. When I run ESPlanner, it suggests I add to the 529 for the next 5 years. How do I get around this? Do I remove the withdrawals for the last 2 years and add them as special expenditures? Trying to figure out the best way to accomplish this. Thanks.


dan royer's picture

In the simplest case, if you want to have 10,000 for qualified 529 withdraw in say 2020, you'd enter that 10K amount for 2020 and the 529 report will show you how much to deposit annually, given the interest rate you specify and the balance you begin with, to achieve that 20K.

Sometimes it helps to create very simple cases like that just to see how it works.

It seems to me that if the program is asking you to make contributions, that's because given your current balance, and given the amounts you indicate in the program that you want to have in the given years you specify, and given the interest rate, that you need to save more to achieve that goal. If you don't want to contribute more, then lower the goal or the amount you want to withdraw and the amount you need to contribute will go down--ultimately to zero.

For example, tell the program that you have 10K now and that you need 10K five years from now and that you are earning 5%. YOu'll see that it calls for no contributions and finally some unqualified withdrawals because you earned interest which put you over your target. Does that make sense?

If you want to indicate some college expenses in the future that do not come out of 529, just enter those as special expenditures. That will take those funds from your regular assets.

We use cookies to deliver the best user experience and improve our site.