college rapidly approaching: question about 529s
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Anonymous
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I am the parent of a high school Junior, so maybe 15 months out from paying college deposits;
I am getting urges to convert all DC's 529 college money to cash RIGHT NOW  due mainly to all the finance sites claiming a correction is nigh
I realize it is irrational on some level but I'm struggling The money is in age adjusted portfolios, moderately aggressive btw |
Anonymous
| I thought that the point of age adjusted portfolios was to move it to safer funds/bonds this close to college. ? |
Anonymous
| You should do this now. Just remember you can only do this like once a year under the tax rules. |
Anonymous
| I would do it. You might leave some money on the table, but we are at a good high right now. And one in the hand... |
Anonymous
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You should do it. My daughter graduated from high school in 2008. I had an urge to convert all the college savings we had for her into bank CDs a year earlier than that. Best move I ever made! The money in the 529 Plan could not be put into CDs, but I converted it to all bonds.
You should not be in any investments where you might lose capital that you will need in the next three to five years. That's just good common sense. |
Anonymous
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I'm the previous poster who put my savings for my daughter's college into cash equivalents in 2007. I wanted to add that it sounds like you are confusing two things. You have heard that you should not try to time the market. That's true. I had no way to know in 2007 that the market was about to go down and you have no way of knowing what the market will do in the next couple of years. However, the fact that you should not try to time the market does not mean that you should leave money in the market that you know you will need in the next few years. The stock market is for long-term investments; money that you will need in the next few years should be in cash or things that are close to cash.
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Anonymous
| There are a lot of options between "cash" and "moderately aggressive" for you to consider. |
Anonymous
| We have our 529 invested to become more conservative as their high school graduation date approaches. I have left ours in the accounts, and have one DD in college now. Have not lost any money. |
Anonymous
some examples please? |
Anonymous
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This is OP...right now it seems the mix is 50% bonds including about 10% inflation linked, 25% stock and 25% Principal protected (cash)
I'm not that comfy with the bonds right now 
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Anonymous
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Then move the bonds to cash. Do you have that option? You are unlikely to earn much money on the bonds with interest rates as low as they are now.
You can't take the money out of the 529 without paying penalties. You have to move it around among the options available within the 529. You can only take the money out of the 529 when you have actual college bills to pay. |
Anonymous
Well, the easiest way is to use one of the package plans that come with the 529. There are almost certainly several options labelled "moderate," "moderately conservative," or conservative. If OP comes up with his or her own portfolio, the main key to managing risk if you want to still has SMS equities is to diversity among several different types of equities and to look for some ETFs with reduced volatility. If OP really doesn't like bonds, hat might be a good portion of the investment portfolio to turn into cash. |
Anonymous
| We shifted to what's called Fund for College at around this time, which is mostly cash. We did leave some in a conservative stock fund since the 4th year was farther out. Has worked out so far. Does your fund have target year funds? Those worked well and they automatically convert to the fund for college. |
Anonymous
| What schools is your child considering? |
Anonymous
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... hit submit too quick - sorry ....
is it worth putting money into independent school 529? |