529 plan allocation for a 2022 graduate

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
freedomlover
Posts: 6
Joined: Wed Dec 16, 2020 11:52 am

529 plan allocation for a 2022 graduate

Post by freedomlover »

Hi, quick question - my daughter is 17 and graduating next year. We have $40k saved in her 529. If we plan to give her $10k a year towards college - meaning, the whole $40k will not need to be used next year, what should the allocation be? I currently have it set as:

50% Vanguard Interest Accumulation
30% Vanguard Total Bond Market
20% Vanguard S&P 500

We have a ton of Vanguard options in our 529.

Thanks!
Nebraska_Drought
Posts: 377
Joined: Fri Nov 13, 2020 10:19 am
Location: Lincoln, NE

Re: 529 plan allocation for a 2022 graduate

Post by Nebraska_Drought »

Does your plan offer any "age based" allocations that you look at to see how they were comprised? Once my son started college, we went to mainly wanting to maintain the balance, even if some potential growth was lost. I got very conservative in my choices as I didn't want to see a market correction take away earnings or even principal while he was in college.
bloom2708
Posts: 9861
Joined: Wed Apr 02, 2014 2:08 pm

Re: 529 plan allocation for a 2022 graduate

Post by bloom2708 »

I think your choices are reasonable.

We got pretty conservative when the kids were 1 year out. Especially if the amount is "enough".

If the kid plans on going to an $80k/year school, maybe you want to be 30-50% stocks, but the market gains won't make up shortfalls. More contributions will.

A student can borrow $5,500 the first year. $6,500 2nd. $1,000+ for each year for undergrad.

The parent has to borrow anything above that. Keep those numbers in mind. A kid working all summer might be able to make $5k.
Last edited by bloom2708 on Thu Apr 15, 2021 8:31 am, edited 1 time in total.
livesoft
Posts: 86079
Joined: Thu Mar 01, 2007 7:00 pm

Re: 529 plan allocation for a 2022 graduate

Post by livesoft »

Your current allocation is fine. It seems that at $10K per year going to college, you will be paying some from your checking account anyways and can make up any shortfall if the 529 plan does not go up in value.

Or shoot for the moon and put it 100% in equities!

In other words, I don't think anyone can tell you what allocation to have.
Wiki This signature message sponsored by sscritic: Learn to fish.
Post Reply