College savings

[Anonymous]

Anonymous wrote:Is a Target date fund or something more aggressive best when starting out with 17l investment in 529 for an newborn?

A target date fund is going to be aggressive for a newborn. The longest time horizon option in VA's plan starts at 85% stock. You'd need to look at the options, their fees, and consider realistically how active you want to be in adjusting your investments over time. Target date funds are convenient because you don't have to remember to change your mix over time but you should know and be comfortable with what is in the fund and its glide path

[Anonymous]

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

Don’t listen to this person. “529 plans are not good for money growth.” That’s like saying 401ks are not good for money growth. You can pick whatever plan for whatever state you want and there are endless investment options. We max out Maryland up to the tax deduction limit and then overflow in Nevada using Vanguard.

If their argument is that they can beat the S&P 500, run even further away from their advice.

[Anonymous]

Anonymous wrote:Any opinions on MD’s 529 plan? Can we invest in total stock market index like the VA one? How are the target date funds there?

The MD 529 target date funds have high fees! But MD offers a lower fee total stock index and a couple of bond options.

I used the target date fund at first, saw the high fees, and switched to a combo of the stock index fund and bonds.

MD 529 limits how many inter-fund transactions you can do per year: 2 or 3 times is the limit. I learned this as I tried to transfer money from the high fee target date fund to others.

I worry that everyone’s 529s will take a big hit with the looming recession. It’s ridiculous that we need to save six figures from age 0 to send our kids to good school.

[Anonymous]

Anonymous wrote:Any opinions on MD’s 529 plan? Can we invest in total stock market index like the VA one? How are the target date funds there?

you can put the contributions into the s&p 500 basically. target date funds arent worth it ever IMO. the contributions are state tax deductible up to i think around $5k per couple in MD and the state tax is insane so it is a no brainer for us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

I wouldn't put my 14 year old's money in it but not an unreasonable choice if you are starting savings with a baby. They also have target date funds that gradually shift to more conservative investments, 85% stock to start with. I was just pointing out that is an option in response to the PP who said you can't invest for growth in a 529.

+1 I use target date funds for my kids’ 529s. In thought this was standard practice? I have a fairly good idea when they’ll need the money after all.

[Anonymous]

Does anyone know where I can find the fees for the VA 529 plans? I’ve looked (though it has been a few months) and can’t find that info.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

Total stock market index is not high risk, unless your kid is 16+. Put the money in there for the first 16 years then start moving it to less risky choices as you approach college. Easy, simple. Watch it grow tax free

[Anonymous]

Anonymous wrote:Does anyone know where I can find the fees for the VA 529 plans? I’ve looked (though it has been a few months) and can’t find that info.

https://www.virginia529.com/invest/fees-expenses/#target-enrollment

VA seems to have good options!

- jealous MD resident

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

Total stock market index is not high risk, unless your kid is 16+. Put the money in there for the first 16 years then start moving it to less risky choices as you approach college. Easy, simple. Watch it grow tax free

Yeah, plus if you think your kid is grad school-bound, why not leave some in the total market past 16

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

Total stock market index is not high risk, unless your kid is 16+. Put the money in there for the first 16 years then start moving it to less risky choices as you approach college. Easy, simple. Watch it grow tax free

This is a really bad advice. Really bad for 529.

[Anonymous]

FYI here are MD 529 fees by fund : https://maryland529.com/Portals/0/Files/MCIP_Disclosure_Statement.pdf

Higher overall than VA

[Anonymous]

But you can't pick your stocks.

This is a very real problem for people who know where they want to invest. Which is why we went with a regular no-fee trading account.
We have done much better than any fund, since our stock pick is mostly AAPL.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

Total stock market index is not high risk, unless your kid is 16+. Put the money in there for the first 16 years then start moving it to less risky choices as you approach college. Easy, simple. Watch it grow tax free

This is a really bad advice. Really bad for 529.

So please provide us your better advice for 529.

[Anonymous]

Anonymous wrote:
But you can't pick your stocks.

This is a very real problem for people who know where they want to invest. Which is why we went with a regular no-fee trading account.
We have done much better than any fund, since our stock pick is mostly AAPL.

So your strategy is to act as though you can outperform the market and to avoid diversification?

Your the smratest!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$15k between the kids or 15k for both?
First, 529 plans are no good for money growth; then you suggest you kill even more of your hard-earned money in bonds, and then, you insist your kids go to college.
If you invested the money properly, both could skip college (or go if they wish) and never work a day in their lives. Their job would be to manage the money you invested for them and have a hobby job.
They could also pay cash for college produced by the investments and not touch the principle.

This totally depends on the options in a particular state's 529 plan. Virginia's 529 has a total stock market index option so yes, you can invest for growth in the 529.

That's a high risk fund for 529 purpose unlike your typical investments, isn't it?

Total stock market index is not high risk, unless your kid is 16+. Put the money in there for the first 16 years then start moving it to less risky choices as you approach college. Easy, simple. Watch it grow tax free

This is a really bad advice. Really bad for 529.

DP: Why? College is a long-term savings goal. I would personally start shifting money out more at 14 (6-10 years before you need it) rather than 16 (4-8 years before you need it).