DC 529 - holy heck

[Anonymous]

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

[Anonymous]

Anonymous wrote:

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

Thank you. I'm looking now, and we're enrolled in the 2034 portfolio, which is 35% Vanguard Total Stock Market Index Instl Plus, 14% iShares MSCI EAFE Instl Index K, 13% Vanguard Total Bond Market II Index, and 13% Vanguard Short-Term Bond Index I, plus some others under 10%. Looks like the average is 5.29% since 2017 when we first opened it and 4.5% over the last five years (2022 was a bad year).

Does that seem good or should we find one with a higher percentage in a stock index fund? Clearly I'm not great at this, and google says we should be aiming for 60% stocks in elementary school.

[Anonymous]

Anonymous wrote:why do people blame 529 plans when it is 100% on them for investing them poorly.

If you use the target date funds, which can makes sense in your situation, know they will become very conservative the years leading up to age 18..hence poor returns.

This was also a weird time because of the rapid interest rate increase made bonds have a significant negative return--and target date funds are just a balance of stock index funds and bond index funds.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

Thank you. I'm looking now, and we're enrolled in the 2034 portfolio, which is 35% Vanguard Total Stock Market Index Instl Plus, 14% iShares MSCI EAFE Instl Index K, 13% Vanguard Total Bond Market II Index, and 13% Vanguard Short-Term Bond Index I, plus some others under 10%. Looks like the average is 5.29% since 2017 when we first opened it and 4.5% over the last five years (2022 was a bad year).

Does that seem good or should we find one with a higher percentage in a stock index fund? Clearly I'm not great at this, and google says we should be aiming for 60% stocks in elementary school.

Everyone is different and everyone has different risk tolerance. Do you absolutely need a certain amount growth for your kid to attend college? If your funds take a big hit, can you make it up? My kids are early ES and we're 100% stock, but we're using the funds for tax free growth as much as anything else so we're willing to take a ton of risk. In your situation, I would either post your specifics on bogle heads - they will give specific advice and it's usually good advice or I would hire a financial planner for a one time consultation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

Thank you. I'm looking now, and we're enrolled in the 2034 portfolio, which is 35% Vanguard Total Stock Market Index Instl Plus, 14% iShares MSCI EAFE Instl Index K, 13% Vanguard Total Bond Market II Index, and 13% Vanguard Short-Term Bond Index I, plus some others under 10%. Looks like the average is 5.29% since 2017 when we first opened it and 4.5% over the last five years (2022 was a bad year).

Does that seem good or should we find one with a higher percentage in a stock index fund? Clearly I'm not great at this, and google says we should be aiming for 60% stocks in elementary school.

Everyone is different and everyone has different risk tolerance. Do you absolutely need a certain amount growth for your kid to attend college? If your funds take a big hit, can you make it up? My kids are early ES and we're 100% stock, but we're using the funds for tax free growth as much as anything else so we're willing to take a ton of risk. In your situation, I would either post your specifics on bogle heads - they will give specific advice and it's usually good advice or I would hire a financial planner for a one time consultation.

Thanks, I'll check out bogle heads. We've got almost $50k in the 529 now, and will need the 529 to cover at least half of a private school tuition. Don't want DC to have to take out loans, but won't be able to pay for it all OOP. I think we're on track now, but don't want to go too aggressive or too conservative for how long we have until college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

Thank you. I'm looking now, and we're enrolled in the 2034 portfolio, which is 35% Vanguard Total Stock Market Index Instl Plus, 14% iShares MSCI EAFE Instl Index K, 13% Vanguard Total Bond Market II Index, and 13% Vanguard Short-Term Bond Index I, plus some others under 10%. Looks like the average is 5.29% since 2017 when we first opened it and 4.5% over the last five years (2022 was a bad year).

Does that seem good or should we find one with a higher percentage in a stock index fund? Clearly I'm not great at this, and google says we should be aiming for 60% stocks in elementary school.

If you want more stock exposure, you can get it by moving some funds to the U.S. Total Stock Market Index Portfolio option.

And to the person who pointed out that Vanguard fees are about 0.2 percent lower: That is only $20 a year for each $10,000 in assets. Yes, it can build up over time, especially if you have more high balances, but fees of about 0.3 percent are perfectly reasonable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

Thank you. I'm looking now, and we're enrolled in the 2034 portfolio, which is 35% Vanguard Total Stock Market Index Instl Plus, 14% iShares MSCI EAFE Instl Index K, 13% Vanguard Total Bond Market II Index, and 13% Vanguard Short-Term Bond Index I, plus some others under 10%. Looks like the average is 5.29% since 2017 when we first opened it and 4.5% over the last five years (2022 was a bad year).

Does that seem good or should we find one with a higher percentage in a stock index fund? Clearly I'm not great at this, and google says we should be aiming for 60% stocks in elementary school.

Everyone is different and everyone has different risk tolerance. Do you absolutely need a certain amount growth for your kid to attend college? If your funds take a big hit, can you make it up? My kids are early ES and we're 100% stock, but we're using the funds for tax free growth as much as anything else so we're willing to take a ton of risk. In your situation, I would either post your specifics on bogle heads - they will give specific advice and it's usually good advice or I would hire a financial planner for a one time consultation.

Thanks, I'll check out bogle heads. We've got almost $50k in the 529 now, and will need the 529 to cover at least half of a private school tuition. Don't want DC to have to take out loans, but won't be able to pay for it all OOP. I think we're on track now, but don't want to go too aggressive or too conservative for how long we have until college.

Bogle heads is the way to go. They'll ask you to list a lot of financial info, but there aren't really trolls and you'll get good advice. Every time I go there, I get more convinced that it's financial planners saying what they really feel

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

Thank you. I'm looking now, and we're enrolled in the 2034 portfolio, which is 35% Vanguard Total Stock Market Index Instl Plus, 14% iShares MSCI EAFE Instl Index K, 13% Vanguard Total Bond Market II Index, and 13% Vanguard Short-Term Bond Index I, plus some others under 10%. Looks like the average is 5.29% since 2017 when we first opened it and 4.5% over the last five years (2022 was a bad year).

Does that seem good or should we find one with a higher percentage in a stock index fund? Clearly I'm not great at this, and google says we should be aiming for 60% stocks in elementary school.

If you want more stock exposure, you can get it by moving some funds to the U.S. Total Stock Market Index Portfolio option.

And to the person who pointed out that Vanguard fees are about 0.2 percent lower: That is only $20 a year for each $10,000 in assets. Yes, it can build up over time, especially if you have more high balances, but fees of about 0.3 percent are perfectly reasonable.

What about the US Large Cap Equity portfolio?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Which plans would PPs recommend for early elementary aged kids? I know ours isn't the best performing, but am frozen with decision paralysis.

A stock index fund up to the limit of tax deductibility in your state's plan and anything above that in the same fund in Vanguard's Nevada fund or a Fidelity's New Hampshire 529 depending on your preference

Thank you. I'm looking now, and we're enrolled in the 2034 portfolio, which is 35% Vanguard Total Stock Market Index Instl Plus, 14% iShares MSCI EAFE Instl Index K, 13% Vanguard Total Bond Market II Index, and 13% Vanguard Short-Term Bond Index I, plus some others under 10%. Looks like the average is 5.29% since 2017 when we first opened it and 4.5% over the last five years (2022 was a bad year).

Does that seem good or should we find one with a higher percentage in a stock index fund? Clearly I'm not great at this, and google says we should be aiming for 60% stocks in elementary school.

If you want more stock exposure, you can get it by moving some funds to the U.S. Total Stock Market Index Portfolio option.

And to the person who pointed out that Vanguard fees are about 0.2 percent lower: That is only $20 a year for each $10,000 in assets. Yes, it can build up over time, especially if you have more high balances, but fees of about 0.3 percent are perfectly reasonable.

.3 is no longer reasonable for any broad market index fund. Any plan with that ratio, be it in a 401k or a 529, is a good indication that the administrators have other priorities than the plan holders.

[Anonymous]

Anonymous wrote:
I'm sorry, OP. Returns from other options within the DC 529 would probably have been better. Usually you are given documentation which flags risks (higher risks, higher rewards), to enable you to choose.

We directly invested in certain stocks in a private account, since you can't hand-pick stocks in a 529. Our returns are significantly better than any 529 option. But we know what we're doing, and the industry and company we chose to invest in.

Another way of saying that is you got lucky stock picking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
I'm sorry, OP. Returns from other options within the DC 529 would probably have been better. Usually you are given documentation which flags risks (higher risks, higher rewards), to enable you to choose.

We directly invested in certain stocks in a private account, since you can't hand-pick stocks in a 529. Our returns are significantly better than any 529 option. But we know what we're doing, and the industry and company we chose to invest in.

Another way of saying that is you got lucky stock picking.

Ha. I thought the same thing when I read that.

[Anonymous]

Target date mutual funds are a scam. If you want real returns never go with a mutual fund

[Anonymous]

DC has an instate university and acting like it doesn’t exist is really offensive.

[Anonymous]

The expenses of DC 529 are ridiculous. Compare to California or Utah.

[Anonymous]

Anonymous wrote:DC has an instate university and acting like it doesn’t exist is really offensive.

Uh … DC absolutely does not have a flagship in-state university like other states. Get over yourself.