Reply to Is there a better vehicle than 529 for college savings right now?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Our 529 offers a CD option. DS has 7 years until college and I've been using a target graduation date option but returns haven't been good mostly because bond funds have sucked instead of being a counter balance to stocks.  I'm thinking of sticking half the money in a CD option and half in an S&P 500 index fund within the 529, then gradually shifting more of the money into CDs within the 529. Is this a bad idea?[/quote]

When my DD was 7, I was fully in stocks. The account doubled by the time they were college age. For anyone who is saying they are underwhelmed by the results of their 529, you need to adjust your investment choices. The target age funds are too conservative in my view.[/quote]

But I knew someone who lost 1/3 of her daughter's college savings due to market timing.

The year before my kid started college I moved the money to something more conservative than the 529 target year fund, so that I would not run the risk of losing any money. My preference....[/quote]

Well obviously, the year before your kid starts college, 75% of it (or more) should be in lower risk investments.  
In the same manner, one kid was 2 years from college at the 2016 election.  We thought the market was going to tank afterwards, so for that kid we pulled 75-80% into lower risk.  The kid who remained in added over $60K to their 529 in gains over the next 6 months.

Do we regret pulling it out---No, because it could have just as easily had a downturn and we needed that money for college in 2 years. The other kid didn't need it for 7 years, so they had time to weather a potential downturn. 
[/quote]

Well check your state’s Target year fund mix. Mine was not conservative enough for me (one year before), so I moved it into  the fund designed for kids already in college. [/quote]

Have never used the Target year funds.  Pick our own and adjust accordingly based on our desired risk as the kids get closer to college. [/quote]

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