When it comes to college funding, there are a few main questions to answer.

• How much to fund?
• Where to fund?
• What if unused for college purposes?

How much to fund?

College cost is soaring like crazy…looks like there is no end in sight. I wish I could fund the entire cost, but I am not sure I can. So, I have set a target of $20000 per year for 4 years. Anything more than this, the kid has to manage.

Where to fund?

I wanted a most generic college funding option. By generic I mean the following:

• 529 plan
• basic age based investment option
• passive fund is okay
• good set of low-cost investment options
• acceptable in any college across the US
• any state tax advantages
• online acct management possible
• automatic investment possible

Since I am a fan of Vanguard, I have a bias towards Vanguard 529 plans. But, I did dig into many articles on the web to find a good 529 options. Turns out, most of the good plans happened to be Vanguard ones. I picked Nevada 529 plan as satisfied all the above requirements.

What if unused for college purposes?

If unused, the 529 plan can be withdrawn but with a 10% penalty. The penalty is applicable ONLY on the earnings in the plan and not on the principal (because I am using post-tax money for investing into the 529 plan). There is a wonderful article from savingforcollege.com that I will refer to here for further reference.

• Rules for money left over from 529 plan

Starting Status

07/25/2014        $22600        28.25% complete

09/29/2014        $23185         28.98% complete

07/04/2020         DONE

….. (see Progress Report for more updates)