Author Topic: College 529 Fund Question  (Read 371 times)

tophdna

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College 529 Fund Question
« on: May 13, 2018, 08:36:46 AM »
I have access to Louisiana START 529 plans being a resident of Louisiana. I'm about to have a newborn later this year and I'm interested in starting a 529 plan and depositing money monthly.

My question is which fund to pick. I'm not afraid of risk. With my current retirement accounts I invest heavily into stocks (vanguard index stock fund) currently (have a long time before retirement).

The funds available are: https://www.startsaving.la.gov/savings/options2.jsp

With my retirement accounts I look for lowest expense ratios as possible and will rebalance the funds myself when I get closer to retirement. However, for simplicity, I'm thinking of rolling with the age based fund with my kid's 529 plan. What do you guys think of Vanguard LifeStrategy Growth Fund (VASGX)? Which is what I'm offered with my state 529 plan.

secondcor521

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Re: College 529 Fund Question
« Reply #1 on: May 13, 2018, 06:48:44 PM »
Of the list of options at the link in your post, I would choose the Institutional Total Stock Market Index fund *if* you're willing to rebalance as your kids get older.  It should have rock-bottom expenses, exposure to the entire US market, and is 100% stocks.

If you don't want to rebalance as your kids get older, then I'd do the aggressive age based option.

But those are just the choices I would make and shouldn't be construed as advice to you.
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tophdna

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Re: College 529 Fund Question
« Reply #2 on: May 13, 2018, 09:39:34 PM »
Thanks for that response. I appreciate it, really. When rebalancing, would you drop 100% into conservative fund or split into some percentage? Treat it just like you were retiring? (Start putting percentage in conservative? Or all of it?)

Iím sorry if this question is a typical question about 529 that I should just go hunt for answers on google.

Radagast

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Re: College 529 Fund Question
« Reply #3 on: May 13, 2018, 10:09:47 PM »
Because the money has a date when all of it will actually be needed, I wouldn't go for 100% stocks all the time. Vanguard's default 529 is for whatever reason the Nevada Plan (Nevada elected progressive Republicans after 2007-9 to "Make Nevada Not Suck Again" and this resulted). Vanguard's preferred plan has 100% stock for the first 4 years, then gradually declines after that.
https://investor.vanguard.com/529-plan/age-based-options

As an approximation of that, I'd do 100% Total World Stock for the first 5 years or so, and then switch to Louisiana "Age-Based Aggressive Track Fund".

secondcor521

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Re: College 529 Fund Question
« Reply #4 on: May 13, 2018, 11:44:59 PM »
I agree with Radagast's response in principle.  What I do is figure out how much will be needed 3 or 4 years ahead of time and put that amount in bonds, the rest in stocks.

You won't find an answer on Google because it really is up to you to dial in your personal risk tolerance along with your goals, timelines, other resources, etc.
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tophdna

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Re: College 529 Fund Question
« Reply #5 on: May 14, 2018, 06:36:22 AM »
Thanks for the responses. This is exactly the information I was looking for. I appreciate it!