Author Topic: 529 Allocation  (Read 380 times)

veganpoledancer

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529 Allocation
« on: January 14, 2018, 10:28:21 AM »
Hello,

Regular MMM reader, first time posting on the forum.  We opened 529 accounts for our three kids this year with Vanguard (had previously been saving in taxable accounts with Betterment).  We followed the allocation suggestions based on their ages, choosing the most aggressive option for each age group.  We are currently contributing the most each month to our oldest's account, since he's 14 and his money has less time to grow.  However, the balance on our 12 year old's account is actually higher than our 14 year old's, because of it has a greater percentage of stocks, therefore has been growing faster.  Should we move a greater percentage of our oldest's college fund to stocks as well?  Or is this risky, as he'll be needing the money in 3 1/2 years?

Thanks for your help.

soccerluvof4

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Re: 529 Allocation
« Reply #1 on: January 14, 2018, 02:19:11 PM »
Hello,

Regular MMM reader, first time posting on the forum.  We opened 529 accounts for our three kids this year with Vanguard (had previously been saving in taxable accounts with Betterment).  We followed the allocation suggestions based on their ages, choosing the most aggressive option for each age group.  We are currently contributing the most each month to our oldest's account, since he's 14 and his money has less time to grow.  However, the balance on our 12 year old's account is actually higher than our 14 year old's, because of it has a greater percentage of stocks, therefore has been growing faster.  Should we move a greater percentage of our oldest's college fund to stocks as well?  Or is this risky, as he'll be needing the money in 3 1/2 years?

Thanks for your help.


That would be like stock picking/prediciting the market ... The allocations normally are set up to be more conservative as they get closer to graduation. So if you change it then you are saying in your mind you think the market is going to go one way or the other. I have 4 kids and there all slightly different balances because of same thing. So if you changed your 14 year olds to be more stock heavy and the market tanked would you feel ok with that?  Thats what you have to ask yourself.