Step 10: Save for College
Phase 3: Build a Legacy · Step 10 of 12
An education legacy, not a blank check.
In short
Save for life after high school in a 529 plan that you own, with your child as the beneficiary. Treat about $150,000 per child as a ceiling, not a requirement, and think of it as a legacy that can pass down to grandchildren.
Why this comes now
College comes after retirement on purpose: there are loans for school, but nobody lends you money to retire. With retirement funded at 15%, part of the surplus can start growing for your kids.
How to do it
- Open a 529 plan with a parent as owner and a child as beneficiary. Look at your own state's plan first; some offer a state tax break.
- Add part of your surplus each month, alongside Steps 9, 11 and 12.
- Invest it in low-cost index options and let it grow.
- Cap it around $150,000 per child. Big gifts have yearly tax limits, so check with a tax pro before going large.
- If a child doesn't need it all, change the beneficiary to another family member.
Example Family: Alex and Jordan
Alex opens a 529 for Maya and one for Leo, with Alex as owner. Each month a slice of the surplus goes in, split between the two, with a ceiling of about $150,000 per child.
Examples are hypothetical.
You're done when
Each child has a 529 that you add to every month, with a target you've agreed on.
Your next step
For education only. Not individual financial, tax or legal advice. Talk to a tax pro or attorney about your situation.