college savings & Roth
Hi, a question about tracking and accounts.
After a year of YNAB & paying off my debt, I chose to increase my retirement savings; it was always at 15% but now it's about 18% of my income. My plan is to increase this further with future raises until I get to about 20 or 23%.
I also started saving a wee bit for my son's college. I opened a 529 that I am funding with just $25/mo. I am also funding a category for him, called young-adult-threshold, at about $80/mo that right now is just staying on my budget. I plan to increase how much goes into that category each month as my budget becomes more sturdy. He's a preschooler right now, my aim is when he graduates high school to have a nice pile of money either for college or vocational training, to start a business, go on an adventure, or something else meaningful. I plan to increase how much I flow into this category as well over time.
As I've been researching this all, it seems that it is wise for us to have some 529 savings for tax diversification, but for the bulk of the money I want for his threshold fund to go into my Roth, since the Roth is more flexible. I discovered this year that my work offers a Roth 457b; this is like a normal Roth, but you can contribute up to 19K per year, not 6K. I'm nowhere close to fully funding either my 401k or my newly-opened 457b so there is plenty of space to pull his threshold fund into those accounts.
I'm wondering if there's anyone else saving for college/young adult threshold funds using their Roth or retirement accounts and your thoughts on that?
I'm also wondering how I can track this in YNAB. If I put the balance of his threshold category into my Roth, is there a way to indicate that X amount of the Roth is earmarked for him? (I find it very motivating to see all the categories split out and would be loathe to lose that aspect in my quest to save) Maybe I could flow all of the college savings into a different investment line within the Roth, as a way of keeping it separate? But I really just want all of it in the same index fund that I chose for my retirement savings.
Any thoughts on this approach I am considering? Thanks everyone!