Killin Me Smalls said:

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This just came across my email this morning related to the "Secure Act 2.0" that passed by congress at the end of the year.

529 Plan Updates

• After 15 years, 529 plan assets can be rolled over to a Roth IRA for the beneficiary, subject to annual Roth contribution limits and an aggregate lifetime limit of $35,000.

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Dumb question


Is that $35K lifetime limit per child or total? I'm assuming the aggregate keyword is for all children but I'm terrible at these rulings.

Without digging into it, my assumption would be aggregate per beneficiary (i.e. child).

Diggity said:

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Killin Me Smalls said:

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Probably redundant with others, but this is what we do and have done for our 3 kids ages 5, 4, 2:

Term life insurance policies for both wife and I

Will/trust in order

529 for each kid - $600/month per kid (this hurts, but I can always scale it back later)

UTMA account for each kid - all birthday/Christmas money goes in here and invested. Once they are old enough, I will allow them to take more ownership in investment decisions. They don't receive any crazy monetary gifts, a couple hundred dollars here and there, but my 5 yo already has nearly $8,000 in his UTMA!

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that seems...excessive

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Benefit of 529 is tax sheltered growth. So, while this may be excessive if continue saving all the way up to college, the proper way to fund a college fund is to get the money in there in time to actually reap the tax sheltered growth rewards.

On the subject of the 529 to Roth...I would be surprised if the rules don't change to drop the "per account" language. I think it will be clarified to $35,000 lifetime cap and annual cap per beneficiary (regardless of which source account). Otherwise, per the calculation being used to get the total contribution to $140,000 for husband and wife, why isn't the limit infinity? If that holds, you could just keep opening different accounts every time you approach $35,000 (including projected growth). Therefore, only limited by the restricted amount you can move each year.

I get that that frontloading is a good strategy, but would think throwing lump sum cash would be a more effective strategy than "over contributing" for the first 8 years or so.

Again, it all goes back to what each individual can do.

We had our first in March 2022. I set up a 529 and a UTMA through Fidelity with $250/month automatic contributions to both. We're also on the same page with most of our family that money for his future is more appreciated than a toy he will get bored of in a few weeks. Any cash gifts go straight to the UTMA.

Currently projecting a surplus of about $20k in the 529 upon completion of school based on the TAMU estimated cost of attendance and $1mil in the other account around his 39th birthday.

But I think the most important thing you can do is be in a position to give them a good example to follow. Although our parents did well, I wouldn't say my wife and I were truly financially savvy until 30. If I knew upon getting out of school what I know now, we would be in so much of a better position.

He said the $600/mo hurts.. so I'm assuming that is as lump sum as he can do. I agree though.. Statistically, best returns always come from investing as soon as you have the money available. Dollar cost averaging is, statistically speaking, a psychological tool that diminishes returns but makes you feel good in the process.

To the OP... It's already been stated, but deserves a repeat,,, ADEQUATE term life insurance should be top priority the moment (before birth actually) you bring a child into your family. And by adequate, I mean enough to replace financial or functional support of either parent.. as well as to fully support the child without adversely effecting the new guardians should something tragic happen to both parents.

And disability insurance to pay the bills should a non lethal circumstance occur. Once you've set that foundation.. then the rest of your financial plans can begin to take shape.

jamey said:

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I decided first and foremost I needed to make sure my own finances and retirement were in order so they arent stuck caring for me later in life. I was running behind on my own retirement so I increased it significantly


Day care alone is a solid $1250 a month or right at the max for a 529 plan so off the bat we wrote off that money as going to daycare for 5 years then to a 529 plan for 13 years

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This is the best answer. Also, i looked into the UMTA accounts and ultimately passed. They have a hard date of 18 to 25 (my recollection) and then after that the kid gets the cash. Im not comfy with that personally, so I just nested a taxable acct under my main acct for each kid.