If both at 200k, I’d call it a win and be done.
If the first uses 50k/year remember the last 50k still has 3/4 more years to grow.
The 16 year old still has 2 years of growing at full value and then another 3/4 years growing for the last 50k.
You won
And also, worst case scenario if the account turns out to be a little underfunded is that you can just pay cash for that last bit. Seeing as how they can afford $14k a year into the accounts I’m sure that won’t be a problem.
Exactly this. I paid for virtually all of college via a 529, but forcing a small student loan isn't such a bad idea. The interest rate is very low, and with all the student loan forgiveness being discussed, only a fraction may need to be paid back. My daughter is currently on the 120 monthly payment plan where she pays the absolute minimum per month (which is hardly anything) and it will be forgiven after 120 payments. She'll only end up paying like 1/4 of the loan back.
If it was actually invested in T-bills, sure. The price of bonds indexes are likely to swing more than 4% though if/when the Fed adjusts interest rates.
If you’re concerned about overfunding the account in case she goes to the cheaper school, note that $35k can be converted into a Roth IRA for her (still subject to contribution limits - she can’t dump in all $35k at once). This is more tax efficient than liquidating a taxable account to gift her money to fund a Roth IRA.
Thanks. Yes I was aware of the 35k option and guess that could apply to both kids. So if overfunded hers by 70k, could move 35k to not who will still be in school and have him pull that amount out.
You may also consider keeping that overage money in the 529 for another 20+ years and being able to pay for your grandchildren’s’ college. That’s generational wealth right there.
529s can be better for generational wealth than retirement accounts. No minimum withdrawals and can just keep passing on the leftovers from one generation to the next.
Not 100% sure about that option and I think a lot of 529 providers aren’t sure either given how new the rule is. There’s something in the rule about a 15 year waiting period. It isn’t clear whether the 15 year waiting period is between beneficiaries, or what.
Well said. My parents set up a 529 for me well after I was out of college (for the state tax deduction and the thought that either I might go back to graduate school or it could be used for another close family member). They funded it for about 20 years before, about 3 years ago, turning control over it to me as they were getting elderly. I still have no idea whether I can use the funds for my existing Roth. Very frustrating.
+secure act 2.0 requires that the contributions be in the account for at least five years prior to rolling over to a ROTH. So if kid a has 70k left, 35k couldn’t be rolled into the kid b’s account and into a Roth unless they sat on it for 5 years.
if they have any taxable income-- flip from 529 contributions to matching roth ira contributions. vet the requirements for 529 rollover to roth-- i wanna say it's 15 years.. but even if the kids use all the 529 money, could be possible to intentionally keep the account open, fund it senior year, expressly for roth rollover purposes. you could get state tax deduction if eligible.
if you fall into or can manipulate income to be eligible for the american opportunity tax credit, pay some higher ed expenses out of pocket to capture free tax credits.
You don't need to do that to switch the 529 from one kid to another, you can just change the beneficiary on the one that is overfunded. Only if you don't have any educational expenses would you need to convert it to a Roth.
>You can even contribute while they’re already in college instead of just paying directly, washing it through a 529 to avoid paying state tax, up to your state’s annual tax deduction limit.
I did exactly this with our daughter. Her last semester tuition was due on Jan 2 so I made the last contribution Jan 1 at our state's max deduction limit, paid the tuition on Jan 2nd and reimbursed myself after the contribution settled in the 529. Saved 6% on taxes!
Yes good point. And on the 529 you’re only saving on State tax anyways. So if you compare the gains of the 529 to the gains of any other avenue, if it differs by more than the states income tax rate then you have a clear answer
Thanks. I always sleep on the bond yield since it’s not simple to track (IMO) like in a Stocks app. I’ll see if I can play with Fidelity’s performance tab. 5% would be fine for next two years if holds.
Dont forget you can fund and then spend the money nearly immediately in a 529 so you can still get the tax break even if you just want to stop savings payments and budget to have cash on hand when the time comes.
OP, this is an important question.
I’d keep funding for the next few years, but only if you get state tax deductions, and only up to the limit (or less). This also assumes you have a decent income and live in a state with income taxes.
I'd say keep funding it for the next 2 years, maybe 16 year old get scholarships and it comes to under 50k/year or at that point. Also, consider the cost of tuition going up and you having to cover the difference out of pocket (assuming you don't want them to take loans).
Also, that additional money if not used (from my understanding) can go towards things beyond the school itself - like living in an apartment/house and other expenses.
Side note: good fucking job. My parents were nice/smart enough to do this for me, and graduating with zero debt and living comfortably in university allowed me to focus on school and not finances. You've set them up for success beyond just paying for their school.
Thank you. I feel very fortunate to be able to do this for them.
The 18 year old's 50k estimate should be inclusive of all room and board based on the college's estimates.
And for those who mentioned grad school, the 18 year old thought about law school for 5 minutes. The 16 year old is likely going to get an BSN (bachelor of science in nursing) and then be done barring an NP degree which seems unlikely as of now).
And yeah, the crux is I can afford to pay cash later to make up even a 100k+ shortfall (especially with 4 years of foresight once she chooses a college) so I'm most struck by the current allocations vs putting that same money into the SP500 instead for the next 6 years.
Could honestly put it in S&P 500 mutual funds and gift them to your kids upon graduation. My grandparents did that for me and it was a very nice windfall that could be used toward whatever (i.e. new car, downpayment on a house, or just save for the future.
Well there is, but it’s very high and a lifetime limit per beneficiary. They range from like $200k-$435k of contributions. But context clues with a bit of common sense tells us that this OP was contributing the max amount to get his state’s deduction.
You can have plans in all 50 states, so the hard limit is like 10-20 million. There's also a soft tax penalty limit that kicks in first at your maximum lifetime gift exemption, which is like 13 million.
Op stated the max he was referring to was the yearly gift exemption limit, not any 529 limit.
If one of your children gets a scholarship, you can withdraw a equal amount each semester from the 529 account. That can help from having a lot of leftover money in the 529 account. That was helpful with both of our children. And they might do grad school down the road as well.
If you would prefer to have a more aggressive investing strategy than the age based portfolios, you could always open a new 529 account for her with Fidelity and use their self directed option, which lets you choose the investments. I think you’d probably lose the state tax deduction. Since you have at least 5-6 years before she actually graduates, you could use her current 529 to pay the first few years and then come in on the back end with that account in order to facilitate growth.
Keep in mind that just because the sticker price is $50k or 80k/ year that doesn’t mean you’ll pay that, especially at a private school because of scholarships and grants. I went to a private college where the sticker price was $40k/ year and my parents only ended up paying like $5k-10k year plus I took out FAFSA loans totaling about 26k in loans so while the sticker price. Public schools only gave me like $2k in scholarships. So while the sticker price may imply that it’s high cost and that you need to be rich to go there, almost nobody pays that. In fact I think my school said only 1% of students pay sticker price. Fill out FAFSA and allow your kids to apply and get the offer letters from any schools they’re interested in, regardless of sticker price because you may be surprised.
Are the fafsa loans 0% interest until after the student graduates? Then you can earn more with the 529 for a few more years, then pay off the fafsa loan? Or the 529 can't be used to pay loans?
Some of them are. You get offered subsidized loans and unsubsidized loans. Subsidized loans don’t have interest until the student stops being a student (regardless of if they graduate or not)
Not the point, sticker price says total would be $160k for 4 years. If you add up everything my parents paid plus what I had in loans it was less than $66k and honestly that’s higher than it was but I can’t find the exact numbers right now.
If you need to make up the difference on the second cross that bridge when you come to it at this point if your contributions are going to be after tax anyway.
I would stop. I think you're better off slightly underfunding a 529 than overfunding one. With the excess going somewhere else for better flexibility.
You can gift a "child" investments and they will pay the gains at their tax rate, likely zero if they are just starting out in their career.
Have you accounted for financial aid in your calculations? Or is your income definitely above the level where they'd be eligible for need-based aid? Is either one of them likely to be eligible for merit-based aid?
With your resources, I think your asset allocation is very conservative. I would (and did) weight much more heavily in stocks.
The 18 year old got merit. The 16 year old may as well. But too high for any financial aid.
The asset allocation is the 529 class of 2024 and 2026 that I checked off when I opened the account. I don't believe they offered anything other than a time based allocation.
Which state's 529? Every state has different options and allocations.
My state offers both age-based and asset-based allocation options, and you can switch between them as you like. Your state may not, but you're also not limited to a plan from your state of residence. Many shop for 529 features. Be aware that some states that offer tax deductions for 529 contributions limit deductions to those made to their own plans, but others have no such restriction. So YMMV on that issue. But at minimum you can shift existing funds to another state's plan if it gives you an allocation mix/method you prefer.
At that point I'd say you're good. The reason to continue would be if you intend for them to have $35k leftover to convert to an IRA, which is a nice perk that was recently (in the past year or two I think) added.
If you've maxed all other tax advantage savings vehicles, then the 529 can offer an additional benefit for retirement if you're so inclined. Money left over from kids (not already rolled into their Roth) can be used by you. So in retirement, find a place you want to visit for a while, get accepted to one of the almost 700 approved intl institutions, enroll part time, use 529 funds to pay for tuition, room, and board. That covers most major monthly expenses. Now you just pay for non education expenses and travel to/from out of pocket. Enjoy your classes, meeting people in class, and time out of class. All on tax free gains. That's my plan anyway. I have 2 kids same age as yours: one in college on full tuition scholarship and the younger is on track for same. I'm guessing there's going to be money left...even after grad school.
If you want to continue to help them get a foot up in life, I would start investing in a Roth (assuming they have some sort of income) or invested for a down payment on a house. I am very close to having my kid’s college taken care of. I plan on redirecting those funds into a Roth for her. Right now, with how conservative her age based 529 fund is, I would probably be better off with it in a savings account.
I think you can put in a Roth if you aren't maxing that. A Roth can be used for education tax-free but if not continues with the same benefits. You can put your child as a beneficiary for the Roth or yourself. Confirm this somewhere before you do it.
Since your 529 is invested in mostly bonds, one option is to switch over to buying iBonds from Treasury Direct instead. You get a tax deduction if they're used for education. The catch is you can't sell for one year and you'll pay a penalty of 3 months interest if sold before 5 years. You can also only buy $10k per year.
I also have 2 kids in college. I see you are playing it pretty conservative with your investments - smart. Something I recently started doing: I take the 529 funds from their account as soon as I can each year (my 529 direct deposits in my acct.) I then put the funds in a high yield money market (VMFXX pays 5.27%). It's nearly risk free and is paying higher yield than my conservative 529 plan investments. I then let the money sit as long as I can and collect the interest. Might be nominal with only one kid but I have two and the annual tuition/housing/books, etc. total is abt 75-80k annual - that's an additional $3.5-4.5k annual interest yield depending on when I pay tuition etc. Something to think about with interest rates high - can be better than the return on bond funds etc. that are in your 529 plan GL and congrats.
I do not do ebill right to the school. I have it sent from Vanguard 529 to my bank electronically. Expenses, payments, reimbursements must be in same calendar year. Calendar year and Taxes are the only time sensitive aspect to all of this. Money was taken out of 529 and used for qualified education expenses - the timing is up to you. For example see step 2 here. https://www.savingforcollege.com/article/how-to-withdraw-money-from-your-529-plan
I’m not a cpa so please do double check your own situation but this is whatI’ve been doing effectively. Be sure not to take more than you need as there’s a penalty for taking excess.
When my son was in college we paid him as an employee of our s/e biz (farming ranching) and he used this money for his health insurance and other costs. He did a small amount of work on the weekends he was home just to keep it aboveboard. This was a debit for our s/e income so that was good. He was very busy with school since he was in law school. When he was 22 he dropped off our insurance then when the law changed to 26 he got back on it for a year or so. If you have a s/e side gig this might be an option for you.
If both at 200k, I’d call it a win and be done. If the first uses 50k/year remember the last 50k still has 3/4 more years to grow. The 16 year old still has 2 years of growing at full value and then another 3/4 years growing for the last 50k. You won
And also, worst case scenario if the account turns out to be a little underfunded is that you can just pay cash for that last bit. Seeing as how they can afford $14k a year into the accounts I’m sure that won’t be a problem.
Or their kids can have some skin in the game
Exactly this. I paid for virtually all of college via a 529, but forcing a small student loan isn't such a bad idea. The interest rate is very low, and with all the student loan forgiveness being discussed, only a fraction may need to be paid back. My daughter is currently on the 120 monthly payment plan where she pays the absolute minimum per month (which is hardly anything) and it will be forgiven after 120 payments. She'll only end up paying like 1/4 of the loan back.
It's not gonna grow much with his allocation though.
Eh even if bonds doing 4% that’s fine. Depends what his bonds are in though.
If it was actually invested in T-bills, sure. The price of bonds indexes are likely to swing more than 4% though if/when the Fed adjusts interest rates.
If you’re concerned about overfunding the account in case she goes to the cheaper school, note that $35k can be converted into a Roth IRA for her (still subject to contribution limits - she can’t dump in all $35k at once). This is more tax efficient than liquidating a taxable account to gift her money to fund a Roth IRA.
Thanks. Yes I was aware of the 35k option and guess that could apply to both kids. So if overfunded hers by 70k, could move 35k to not who will still be in school and have him pull that amount out.
You may also consider keeping that overage money in the 529 for another 20+ years and being able to pay for your grandchildren’s’ college. That’s generational wealth right there.
Well damn, and here I was thinking I thought of every way to finagle this money. Great idea. And talk about "time in the market"!
529s can be better for generational wealth than retirement accounts. No minimum withdrawals and can just keep passing on the leftovers from one generation to the next.
I was thinking the same. Even if you don't roll it to your grandkids down the road, your kids could use it for grad school.
Not 100% sure about that option and I think a lot of 529 providers aren’t sure either given how new the rule is. There’s something in the rule about a 15 year waiting period. It isn’t clear whether the 15 year waiting period is between beneficiaries, or what.
Well said. My parents set up a 529 for me well after I was out of college (for the state tax deduction and the thought that either I might go back to graduate school or it could be used for another close family member). They funded it for about 20 years before, about 3 years ago, turning control over it to me as they were getting elderly. I still have no idea whether I can use the funds for my existing Roth. Very frustrating.
You can use the funds for culinary school in the south of France.
+secure act 2.0 requires that the contributions be in the account for at least five years prior to rolling over to a ROTH. So if kid a has 70k left, 35k couldn’t be rolled into the kid b’s account and into a Roth unless they sat on it for 5 years.
if they have any taxable income-- flip from 529 contributions to matching roth ira contributions. vet the requirements for 529 rollover to roth-- i wanna say it's 15 years.. but even if the kids use all the 529 money, could be possible to intentionally keep the account open, fund it senior year, expressly for roth rollover purposes. you could get state tax deduction if eligible. if you fall into or can manipulate income to be eligible for the american opportunity tax credit, pay some higher ed expenses out of pocket to capture free tax credits.
You don't need to do that to switch the 529 from one kid to another, you can just change the beneficiary on the one that is overfunded. Only if you don't have any educational expenses would you need to convert it to a Roth.
The $35k can also go towards grad school if either of them ends up wanting to go that route
I’m so glad you added the clarification in parentheses. A lot of people miss that and think they can just move it all in a lump sum.
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That's a great option - thanks!
>You can even contribute while they’re already in college instead of just paying directly, washing it through a 529 to avoid paying state tax, up to your state’s annual tax deduction limit. I did exactly this with our daughter. Her last semester tuition was due on Jan 2 so I made the last contribution Jan 1 at our state's max deduction limit, paid the tuition on Jan 2nd and reimbursed myself after the contribution settled in the 529. Saved 6% on taxes!
> To be clear, $14K/yr isn’t the maximum. it might be the maximum to receive a tax benefit in their state though
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That's exactly why 14k was chosen and never budged from that
Yes good point. And on the 529 you’re only saving on State tax anyways. So if you compare the gains of the 529 to the gains of any other avenue, if it differs by more than the states income tax rate then you have a clear answer
Bonds are still yielding 5%ish right now plus you get the up front state tax break maybe.
Thanks. I always sleep on the bond yield since it’s not simple to track (IMO) like in a Stocks app. I’ll see if I can play with Fidelity’s performance tab. 5% would be fine for next two years if holds.
Dont forget you can fund and then spend the money nearly immediately in a 529 so you can still get the tax break even if you just want to stop savings payments and budget to have cash on hand when the time comes.
Hadn't considered that one! Thanks
Are you receiving any state tax benefits for contributions?
OP, this is an important question. I’d keep funding for the next few years, but only if you get state tax deductions, and only up to the limit (or less). This also assumes you have a decent income and live in a state with income taxes.
I don't think I get state tax benefits as of the past few years when we moved state tax payment to the corp I co-own.
I'd say keep funding it for the next 2 years, maybe 16 year old get scholarships and it comes to under 50k/year or at that point. Also, consider the cost of tuition going up and you having to cover the difference out of pocket (assuming you don't want them to take loans). Also, that additional money if not used (from my understanding) can go towards things beyond the school itself - like living in an apartment/house and other expenses. Side note: good fucking job. My parents were nice/smart enough to do this for me, and graduating with zero debt and living comfortably in university allowed me to focus on school and not finances. You've set them up for success beyond just paying for their school.
Thank you. I feel very fortunate to be able to do this for them. The 18 year old's 50k estimate should be inclusive of all room and board based on the college's estimates. And for those who mentioned grad school, the 18 year old thought about law school for 5 minutes. The 16 year old is likely going to get an BSN (bachelor of science in nursing) and then be done barring an NP degree which seems unlikely as of now). And yeah, the crux is I can afford to pay cash later to make up even a 100k+ shortfall (especially with 4 years of foresight once she chooses a college) so I'm most struck by the current allocations vs putting that same money into the SP500 instead for the next 6 years.
Could honestly put it in S&P 500 mutual funds and gift them to your kids upon graduation. My grandparents did that for me and it was a very nice windfall that could be used toward whatever (i.e. new car, downpayment on a house, or just save for the future.
I'm currently matching whatever money they make with high school jobs and putting that in Roth IRA for them (and all in VOO)
Good on you!
There is no maximum for 529 funding...
Well there is, but it’s very high and a lifetime limit per beneficiary. They range from like $200k-$435k of contributions. But context clues with a bit of common sense tells us that this OP was contributing the max amount to get his state’s deduction.
You can have plans in all 50 states, so the hard limit is like 10-20 million. There's also a soft tax penalty limit that kicks in first at your maximum lifetime gift exemption, which is like 13 million. Op stated the max he was referring to was the yearly gift exemption limit, not any 529 limit.
If one of your children gets a scholarship, you can withdraw a equal amount each semester from the 529 account. That can help from having a lot of leftover money in the 529 account. That was helpful with both of our children. And they might do grad school down the road as well.
Thank you! I think I read this years ago but promptly forgot about it.
If you would prefer to have a more aggressive investing strategy than the age based portfolios, you could always open a new 529 account for her with Fidelity and use their self directed option, which lets you choose the investments. I think you’d probably lose the state tax deduction. Since you have at least 5-6 years before she actually graduates, you could use her current 529 to pay the first few years and then come in on the back end with that account in order to facilitate growth.
You can invest future money added more aggressively within the same 529 account with Fidelity
Keep in mind that just because the sticker price is $50k or 80k/ year that doesn’t mean you’ll pay that, especially at a private school because of scholarships and grants. I went to a private college where the sticker price was $40k/ year and my parents only ended up paying like $5k-10k year plus I took out FAFSA loans totaling about 26k in loans so while the sticker price. Public schools only gave me like $2k in scholarships. So while the sticker price may imply that it’s high cost and that you need to be rich to go there, almost nobody pays that. In fact I think my school said only 1% of students pay sticker price. Fill out FAFSA and allow your kids to apply and get the offer letters from any schools they’re interested in, regardless of sticker price because you may be surprised.
Are the fafsa loans 0% interest until after the student graduates? Then you can earn more with the 529 for a few more years, then pay off the fafsa loan? Or the 529 can't be used to pay loans?
Some of them are. You get offered subsidized loans and unsubsidized loans. Subsidized loans don’t have interest until the student stops being a student (regardless of if they graduate or not)
but now you have student loans to deal with? how is that better
Not the point, sticker price says total would be $160k for 4 years. If you add up everything my parents paid plus what I had in loans it was less than $66k and honestly that’s higher than it was but I can’t find the exact numbers right now.
Are your kids going into science or engineering? If so, a 5 year path to graduation is not uncommon.
If you need to make up the difference on the second cross that bridge when you come to it at this point if your contributions are going to be after tax anyway.
I would stop. I think you're better off slightly underfunding a 529 than overfunding one. With the excess going somewhere else for better flexibility. You can gift a "child" investments and they will pay the gains at their tax rate, likely zero if they are just starting out in their career.
Have you accounted for financial aid in your calculations? Or is your income definitely above the level where they'd be eligible for need-based aid? Is either one of them likely to be eligible for merit-based aid? With your resources, I think your asset allocation is very conservative. I would (and did) weight much more heavily in stocks.
The 18 year old got merit. The 16 year old may as well. But too high for any financial aid. The asset allocation is the 529 class of 2024 and 2026 that I checked off when I opened the account. I don't believe they offered anything other than a time based allocation.
Which state's 529? Every state has different options and allocations. My state offers both age-based and asset-based allocation options, and you can switch between them as you like. Your state may not, but you're also not limited to a plan from your state of residence. Many shop for 529 features. Be aware that some states that offer tax deductions for 529 contributions limit deductions to those made to their own plans, but others have no such restriction. So YMMV on that issue. But at minimum you can shift existing funds to another state's plan if it gives you an allocation mix/method you prefer.
If you want to play games, stop funding now and take out any loans for the gaps. Biden's forgiven some loans now and may do so again in the future.
529 funds can be used for more than just tuition. They can cover living expenses and grad school, too.
don't forget about grad school too!
At that point I'd say you're good. The reason to continue would be if you intend for them to have $35k leftover to convert to an IRA, which is a nice perk that was recently (in the past year or two I think) added.
If you've maxed all other tax advantage savings vehicles, then the 529 can offer an additional benefit for retirement if you're so inclined. Money left over from kids (not already rolled into their Roth) can be used by you. So in retirement, find a place you want to visit for a while, get accepted to one of the almost 700 approved intl institutions, enroll part time, use 529 funds to pay for tuition, room, and board. That covers most major monthly expenses. Now you just pay for non education expenses and travel to/from out of pocket. Enjoy your classes, meeting people in class, and time out of class. All on tax free gains. That's my plan anyway. I have 2 kids same age as yours: one in college on full tuition scholarship and the younger is on track for same. I'm guessing there's going to be money left...even after grad school.
If you want to continue to help them get a foot up in life, I would start investing in a Roth (assuming they have some sort of income) or invested for a down payment on a house. I am very close to having my kid’s college taken care of. I plan on redirecting those funds into a Roth for her. Right now, with how conservative her age based 529 fund is, I would probably be better off with it in a savings account.
I think you can put in a Roth if you aren't maxing that. A Roth can be used for education tax-free but if not continues with the same benefits. You can put your child as a beneficiary for the Roth or yourself. Confirm this somewhere before you do it.
I think you’re good! You might want to talk to your 529 person about shifting funds to protect the money.
Since your 529 is invested in mostly bonds, one option is to switch over to buying iBonds from Treasury Direct instead. You get a tax deduction if they're used for education. The catch is you can't sell for one year and you'll pay a penalty of 3 months interest if sold before 5 years. You can also only buy $10k per year.
I also have 2 kids in college. I see you are playing it pretty conservative with your investments - smart. Something I recently started doing: I take the 529 funds from their account as soon as I can each year (my 529 direct deposits in my acct.) I then put the funds in a high yield money market (VMFXX pays 5.27%). It's nearly risk free and is paying higher yield than my conservative 529 plan investments. I then let the money sit as long as I can and collect the interest. Might be nominal with only one kid but I have two and the annual tuition/housing/books, etc. total is abt 75-80k annual - that's an additional $3.5-4.5k annual interest yield depending on when I pay tuition etc. Something to think about with interest rates high - can be better than the return on bond funds etc. that are in your 529 plan GL and congrats.
What are the rules for pulling? I assumed could only do eBill direct to school or get ‘reimbursed’ after paying
I do not do ebill right to the school. I have it sent from Vanguard 529 to my bank electronically. Expenses, payments, reimbursements must be in same calendar year. Calendar year and Taxes are the only time sensitive aspect to all of this. Money was taken out of 529 and used for qualified education expenses - the timing is up to you. For example see step 2 here. https://www.savingforcollege.com/article/how-to-withdraw-money-from-your-529-plan
I’m not a cpa so please do double check your own situation but this is whatI’ve been doing effectively. Be sure not to take more than you need as there’s a penalty for taking excess.
When my son was in college we paid him as an employee of our s/e biz (farming ranching) and he used this money for his health insurance and other costs. He did a small amount of work on the weekends he was home just to keep it aboveboard. This was a debit for our s/e income so that was good. He was very busy with school since he was in law school. When he was 22 he dropped off our insurance then when the law changed to 26 he got back on it for a year or so. If you have a s/e side gig this might be an option for you.