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529 Balance and Investment Options

Posted on 3/12/24 at 2:26 pm
Posted by BamaAlum02
Huntsville, AL
Member since Nov 2005
1016 posts
Posted on 3/12/24 at 2:26 pm
For those of you that are funding 529 plans for your kids, how much are you putting in there? Also, when do you start changing up investments to lower risk?

I have a sophomore and I'm striving for $120k for her. I have two younger than her and I guess I will adjust for inflation and try to save more depending on where college costs are at the time.

For the younger two, I am 100% in a Vanguard S&P 500 ETF. For the sophomore, I have $30k in MM, $30k in a bond fund, $60k in the S&P 500 ETF. Will probably move another $30k from S&P to MM soon. I'm actually only a little shy of the $120k so thinking about moving it all to MM.

Struggling with this because this is my first going to college and don't really know the expenses. The ability to convert $35k to a Roth helps to know she can get that benefit if I have overestimated (not likely). The short turnaround makes me scared of market fluctuations so I feel like I'm being too conservative on allocation but worried I can't recover from a downturn.

Any others dealt with this and can give advice?

Apologies if this has been covered but did a search and nothing came up.

Posted by makersmark1
earth
Member since Oct 2011
16041 posts
Posted on 3/12/24 at 2:34 pm to
It sounds like you will need some of the money in 2-5 years.

It is impossible to call tops and bottoms, but money that will be spent in 2-5 years probably needs to be fairly cash heavy.

Of course, the minute you take that account to 50% cash, the market will ride a rocket ship to infinity. It’s ok. You are right to set some of this account in cash. If you don’t, the market will crash hard.


Posted by masoncj
Atlanta
Member since Jun 2023
289 posts
Posted on 3/12/24 at 4:37 pm to
I wouldn’t and I don’t have any of it in Bonds or M&M.

I have 529 for my senior HS daughter and intend to leave it S&P fund for durations of her college education.

You have to remember your only taking out funds as you need them
Posted by Cornelius
1800s
Member since Aug 2012
1049 posts
Posted on 3/12/24 at 4:45 pm to
I'm a good ways away from paying for college, but I'd take a look at some target date funds to see how they are allocated.

Just a quick look at the Vanguard Target Enrollment 2026/2027 Portfolio shows a 22.5% stock allocation (unevenly split between total stock market index fund and total international stock index fund). Seems like your proposal to move another $30K from S&P to MM wouldn't be too far off from this.
Posted by GEAUXT
Member since Nov 2007
29299 posts
Posted on 3/12/24 at 8:53 pm to
We started a 529 for each kid (3) at birth. We max the state deduction for each kid so thats $4,800 per kid per year. 100% stocks.
Posted by SulphursFinest
Lafayette
Member since Jan 2015
8881 posts
Posted on 3/13/24 at 4:38 am to
That’s solid for your kids. You’re doing great. I wish I could put that much. I hope a politician eventually fights the schools on this BS they are charging for an education
Posted by AkronTiger
Rubber City
Member since May 2021
1547 posts
Posted on 3/13/24 at 8:28 am to
Maxing the state income tax discount, 4000 per kid in Vanguard Target Date. Congrats on all your hard work!
This post was edited on 3/13/24 at 8:28 am
Posted by ColoradoAg03
Denver, CO
Member since Oct 2012
6228 posts
Posted on 3/13/24 at 10:47 am to
Our son is only 1.5 years old and we started his 529 right after he was born. We put in $440/month, setup to auto-withdraw from our checking account monthly.

It's Vanguard's aggressive growth portfolio that currently invests in only 2 index funds.

Vanguard® Institutional Total Stock Market Index Fund 60%
Vanguard® Total International Stock Index Fund 40%

I'll keep it on the aggressive portfolio at least until he's in high school.


This post was edited on 3/13/24 at 10:53 am
Posted by thatguy777
br
Member since Feb 2007
2392 posts
Posted on 3/13/24 at 10:32 pm to
I do the 529 la start. 250 per kid per month. Grandparents do 50 per month and we get money sent to us for holidays that I put in also. Prob comes out to 4k/year per kid or so. Started right after we got their social security cards as required to set up. If the kids need more than that for college they can figure it out lol
This post was edited on 3/13/24 at 10:34 pm
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