Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We have 529s for our middle and high school sons. We are concerned about market volatility and are wondering if we can protect the value of their portfolios by changing their asset allocation and putting most of the money in a money market fund. We would not withdraw the money, rather our interest is becoming fully conservative until they withdraw for college expenses. We checked the Vanguard FAQ page, but we aren't quite certain if this would be permissible.
The danger of the 529 plan -- you lose control over your own money.
That’s a bit dramatic because you can take your money out at any time. It’s also an attempt at keeping mommy and daddy from being professional assent managers
That’s a bit dramatic because you can take your money out at any time. It’s also an attempt at keeping mommy and daddy from being professional assent managers
OK. Admittedly I am not a 529 expert. My daughter is in 8th grade now, just 5 years left - and we looked into it briefly and decided not to with it.
they can be excellent . our kids use them to fund preschool and kindergarten for the little one since he is in a private school and they are considered qualified for this purpose.they put the money in and out it comes tax free for the school .
Location: Chapel Hill, NC, formerly NoVA and Phila
9,777 posts, read 15,783,646 times
Reputation: 10886
I have money in the North Carolina 529 plan. My oldest is in 11th grade, so about 6 months ago, I put a portion of it in a deposit account (paying 2%) which is one of the 529 plan's investment choices. You would need to check what your state's 529 plan offers as options.
I think once you get to the point of less than a 5-year time horizon, it makes sense to have some money in a stable account, unless you are in one of those target date funds which rebalances automatically as they get closer to college.
The idea should be to move money from more risky assets to less risky as you get closer to a need for the funds. No one know when the market will tank but it does have a good chance of doing it while you need the money. I would look toward CD's, individual bonds or short term bond funds if you can.
I have a 529 through Schwab. They have a 'cash and cash equivalent' option available. I imagine your options depend on your state and broker. You should call Vanguard and ask them.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,062 posts, read 7,500,158 times
Reputation: 9788
Quote:
Originally Posted by flyingsaucermom
We have 529s for our middle and high school sons. We are concerned about market volatility and are wondering if we can protect the value of their portfolios by changing their asset allocation and putting most of the money in a money market fund. We would not withdraw the money, rather our interest is becoming fully conservative until they withdraw for college expenses. We checked the Vanguard FAQ page, but we aren't quite certain if this would be permissible.
Do you know?
In 2001 and 2002, Oregon's 529 plan had a conservative allocation (Blue chips, dividend payers, bonds, preferreds) as their most conservative plan. It did not have a MMkt. Son, matriculated in 2002. In the fall of 2002, I openly told the State Treasurer at a 529 presentation at son's HS, to add a MMmkt because the current plan was exposed to all risks and we didnt need or want any risk while "in school".
If the 529 plan does not have a Mmkt. I'd exit it fast if not faster.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
