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2015 College Savings...The New Plan

September 9th, 2014 at 07:08 am

I mentioned earlier this month that I realized with my daughter turning 18 in March, I might not be able to contribute to her Coverdell Savings Account next year. Vanguard did confirm that after her birthday, we can no longer contribute to her account.

The plan has been to contribute $2000 per year for each of our daughters. If I stay with our current plan of contributing by month she would only have $501 as of her birthday. This is short $1499 of the goal.

I have made a new plan to get the $2000 into her account by her birthday in March. We will contribute $667 for January and February and $666 for March. The additional $500 invested each month with come from our Roth contributions in those months. For the first three months of 2015, our Roth contributions will be $208.33 each, rather than the $458.33 we currently each contribute monthly.

Beginning in April, the contributions for our oldest daughter will end. Our new Roth contributions will increase to $541.67 each for the remaining 9 months of the year. In the end we will contribute to all accounts the same amount we usually do, but the timing and monthly amounts will be different.

I could just take from savings in March and make up the difference, but I guess I just don't want to do that. Maybe if the market is way down, I will consider it to make sure we are getting a few more shares purchased. But for now, I like the new plan!

3 Responses to “2015 College Savings...The New Plan”

  1. scfr Says:

    Will you allow a little lead time to make sure the final contribution posts before her birthday? If any of your family members contribute to her Coverdell for birthday gifts, you may want to give them a heads-up. (I contribute to my niece and nephew's college funds and I'd do an early birthday gift and probably Christmas as well if I knew contributions were coming to an end.)

  2. creditcardfree Says:

    Good points, scfr! We are the only ones contributing to her college fund. It did all start with my father in law starting UGMA accounts when they were born. He died when the girls were young, so I'm very thankful at the beginning he provided. Smile
    The contributions will be automatically funded around mid month so they will easily post before her birthday. I will change the amounts after this years contributions have been made.

  3. scfr Says:

    What a wonderful legacy your father in law left!

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