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529 Balance and Investment Options
Posted on 3/12/24 at 2:26 pm
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.
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.
8
Posted on 3/12/24 at 2:34 pm to BamaAlum02
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.
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 on 3/12/24 at 4:37 pm to BamaAlum02
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
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 on 3/12/24 at 4:45 pm to BamaAlum02
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.
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 on 3/12/24 at 5:09 pm to masoncj
I’m only taking out as needed but will most likely exhaust the $120k unless there are significant scholarships.
I guess I’m not comfortable with the thought of the funds not being there when I need them. And that is probably likely to happen at some point over the next 5-6 years.
I guess I’m not comfortable with the thought of the funds not being there when I need them. And that is probably likely to happen at some point over the next 5-6 years.
Posted on 3/12/24 at 5:11 pm to Cornelius
quote:
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.
I’ve generally avoided target date funds if at all possible due to the fees they generally have. But it’s a good idea to look at allocation and mirror that.
Posted on 3/12/24 at 8:53 pm to BamaAlum02
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 on 3/13/24 at 4:38 am to BamaAlum02
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 on 3/13/24 at 8:28 am to BamaAlum02
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 on 3/13/24 at 10:47 am to BamaAlum02
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.
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 on 3/13/24 at 8:18 pm to masoncj
quote:
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
Depending on your daughter’s qualified education expenses, that’s incredibly ballsy. Like a lot of balls.
For the OP, I’d be targeting closer to 30% stocks. You have funds you know you’ll need in 2.5 years and you can get quality yield on short term options. No point in risking it this close to the finish line.
Posted on 3/13/24 at 9:53 pm to slackster
Use some simulator tools and see what you come up with …it’s fun to play around with
I like HonestMath app myself ..try it out
Original poster said he hoped to have $120k saved
Using that as a bases
The Software ran 10000 simulations (I did it based on S&P returns of 10% per annum, my daughter 529 is right at 15% since inception mind you)and worst case scenario would be that she was short $2500 at time of graduation
Best case is she had $40k left in account
I will take those odds any day of the week
I like HonestMath app myself ..try it out
Original poster said he hoped to have $120k saved
Using that as a bases
The Software ran 10000 simulations (I did it based on S&P returns of 10% per annum, my daughter 529 is right at 15% since inception mind you)and worst case scenario would be that she was short $2500 at time of graduation
Best case is she had $40k left in account
I will take those odds any day of the week
This post was edited on 3/13/24 at 10:12 pm
Posted on 3/13/24 at 10:11 pm to masoncj
For those living in Louisiana…
Is the LA Start program the best option for a 529 or is a firm like Vanguard or Schwab better?
Is the LA Start program the best option for a 529 or is a firm like Vanguard or Schwab better?
Posted on 3/13/24 at 10:32 pm to BamaAlum02
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
Posted on 3/13/24 at 10:37 pm to masoncj
quote:
Original poster said he hoped to have $120k saved Using that as a bases The Software ran 10000 simulations (I did it based on S&P returns of 10% per annum, my daughter 529 is right at 15% since inception mind you)and worst case scenario would be that she was short $2500 at time of graduation
He’s already at $120k based on his post and he’ll be at $135k in short term options in 2.5 years.
Also, that math makes no sense in a simulator. The worst case scenario in such a small window is far worse than running out the month before graduation.
You are using much different numbers than the OP presented.
ETA- for the sake of clarity, what hypothetical did you run?
This post was edited on 3/13/24 at 10:39 pm
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