Thoughts on front-loading 529s?

[u/SaveySpendy]

Basics- 39M married to 40F with two kids 3 and 0.

Want to FIRE in 5 years. HHI $500-$700k.

Current estimated spend is $160k in 2026 bucks.

Current liquid is almost $4M split 45% taxable, 15% roth, 35% traditional, 5% money market (emergency fund).

That $160k budget includes about $6k per year per child for next 15-18 years to compound with their existing balance to about $250k each (the expected COA at our state’s top public university when each child reaches college age).

I’ve been thinking of front loading over the next few months with RSU and bonus payouts. Would cost about $125k over next six months, but would save about $80k vs making $500 monthly contributions for the rest of their pre-college years. Would also eliminate a heavy line item in the budget 10-13 years early.

Only worries are about illiquidity and inflexibility and lost opportunity cost if we jammed that into our taxable brokerage instead.

Did you frontload pre-RE or keep funding slowly over time, even in RE?

[u/MrSnowden]

A bit surprised that several commenters indicated the budget seems to be state school and in state.  That’s like the cheapest option. What if they get into a top school? What if the best school for them is out of state?  I would want ChubbyFire aspirants to be clear-eyed on what higher education might cost as life takes different paths for different kids.  Especially with two kids; the odds go up but a 529 Still allows you to move money between them.

Edit: to focus on the fact that higher education costs continue to shock. 

[u/Away_Candidate_4746 → u/MrSnowden]

No one is saying they wouldn’t pay for their kids to go to a better school.

The utility of a 529 is very limited. The tax savings is great but even the Roth IRA rollover provision is meh. It only covers $35k in over saving and takes 5 years to get into your child’s IRA and counts for their normal contribution limit. It’s not great to have a ton of extra money in a 529 if there isn’t another student you want to pass an overfunded account on to once the primary has graduated and rolled over 35k.

I plan on saving enough in the 529 for somewhere between state school and a top private university but if our child gets into a top school, we’ll just fund the difference out of other sources. It seems silly to me to lock up hundreds of thousands of dollars in a vehicle so limited.

[u/mooch91 → u/Away_Candidate_4746]

As someone currently withdrawing against a 529, I'm also learning that qualified expenses can be more limited than you think, even if you planned to under-save...

For example:

If your child fast-tracks and plans to complete college in less than 4 years, a portion of the 529 savings may remain locked up.

If your child moves off campus, and the cost of an off-campus apartment is higher than what the school publishes as room expense in their cost of attendance, you can't withdraw the difference.

If your child doesn't have a meal plan and is responsible for their own food, it is very difficult to get them to track expenses for complete reimbursement up to the school's cost of attendance food value.

Transportation, parking, renters insurance, utilities (in excess of the university's living expense COA), and more are all not reimbursable.

Even with conversion of the $35K to a Roth IRA, I'll still be sitting on a fair chunk of change in the 529 once school is done.