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!
529 plan allocation for a 2022 graduate
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Re: 529 plan allocation for a 2022 graduate
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.
Re: 529 plan allocation for a 2022 graduate
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.
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.
Re: 529 plan allocation for a 2022 graduate
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.
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.