Should I keep contributing to my daughter's 529 plan, or should I leave it alone and let it grown until she is ready to go to college?

My child is three years old and has $15,000 in the 529 plan.

College Tuition, Financial Planning
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October 2017
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Typically, I would recommend continuing contributions as long as it is not a hinderance to the contributors financial well being. Also, the 10 year average for increase in tuition rates is 5% annually and the average tution rates for the 2016-2017 school year are the following:

  • $33,480 at private colleges or $69,602.52 for the 2031-2032 school year
  • $9,650 for state residents at public colleges or $20,061.66 for the 2031-2032 school year
  • $24,930 for out-of-state residents attending public universities or $51,827.68 for the 2031-2032 school year

Below your will find estimated ending market value when your daughter turns 18 for 3 different scenarios

  • 5% return compounded annually on a starting value of $15,000 over 15 years with no further contributions is $31,705.56
  • 5% return compounded annually on a starting value of $15,000 over 15 years with annual contributions in the amount of $1,000 is $53,841.41
  • 5% return compounded annually on a starting value of $15,000 over 15 years with annual contributions in the amount of $5,000 is $144,471.38

 

October 2017
October 2017
October 2017
October 2017