529 Plans--How to Invest for a Child's Education (w/ Free Spreadsheet)
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- Опубліковано 15 сер 2021
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Investing for a child's education presents at least two challenges. First, we don't have a lot of time to save and invest. In most cases, we have 18 years, and in many cases, a lot less. Second, Once they graduate from high school, they need the money quickly over the next few years. In this way it's very different than retirement, where we plan to spend our nest egg over 30 years or more.
In this video, we are going to use Utah's excellent 529 plan as a framework on how to invest for a child's education. And a big thanks to a viewer named Dan who put together an awesome spreadsheet to help us.
Spreadsheet: docs.google.com/spreadsheets/...
Utah's 529 Plan: my529.org/
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While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
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Did this for our 2 kids 20 years ago. Both will graduate from undergraduate and graduate studies with no debt. Very happy we did. Thank you stock market. 😉
Would have loved to hear your take on how much you should invest for a child in a 529 taking into account not knowing cost of education, education policy changes, school options, and if they will even attend college. Can't know all of this 10-18 years out. Also draw down strategies if you aren't going to cover all 4-6 years worth of cost. Spend it all in the first years or keep it there and let it grow for year 3-4?
I was lucky because of last 20 years bull market. I send my 1st kid through college 100% stock options in Utah plan, still have 1/2 left for my 2nd kid. It’s a my estate planning tool. If stock crashed when I need it. I just use my saving to pay my kids education. I will let 529 grow forever to my grand kids.
Utah's FDIC option is now above 5%, our child is nearing college age with adequate funds so we are locking it in so long as thebrate is decent
Good timing I found this. Was looking for a 529 plan for my future grandkids.
Future?
Thanks Rob. I started a 529 pre-kid and changed the beneficiary to them upon birth. Seems the admin fees make Utah more expensive than Michigan for every fund choice.
Excellent video Rob! You've given me a lot to think about.
I'm still in the default allocation but haven't ruled out customizing my own.
There is definitely something to be said for the simplicity of a set-it-and-forget-it allocation.
Rob with the knowledge bombs 💣
Hi Rob How are you doing today? Love your videos 🙌🏻 Keep making more informative videos 🤩
So I’m just now learning about helping save for 1yo grandchild education. How do we learn “how” to invest - amount (lump and/or over time, parents vs grandparents issues, etc).
Thank you fir your amazing educational videos!!!
Thanks for the detailed analysis!! Analyzing various plans in 2016, we picked Utah's My529 though we are from Ohio, and have been very pleased with their options and performance. I know many other's from states like IN, TX, etc. who picked Utah's plan.
Ohio’s is also one of the top-rated plans, plus you get an additional up front state tax deduction (up to $4000/yr).
Just found your channel a few weeks ago. I'm so thankful. Question about the spreadsheet: Are each age groups' breakdowns for contributions in that year only or for the total makeup of the portfolio to date?
What are the pros and cons of the PIMCO interest income fund vs the FDIC Insured account?
I'm 36 years old and still learning, but, I do not understand putting any money in bonds, it seems to me you would have the same result by keeping cash. I know at one time bonds were profitable and stable, but to me, in the sense of inflation, they are the same as holding cash.
And worse than cash in regards to the duration when interest rates go up.
I used to have a bond allocation and had since depleted it and stopped contribution to it past couple of years. Instead I’ve been using cash to hold for investment opportunities. Imminent rising rates are a nightmare for bonds
Two years later and this comment is still relevent
What would be an appropriate 529 savings goal? Would $150,000 be excessive in a 529?
Just my opinion, but my approach was to come up with a goal and target that. So for us, we decided to try and fund in state local university for four years. From there, and looking at what the average in state costs are and projecting what it may be by the time your kid is 18, we determined how much to contribute monthly. A lot of it is just estimating because that's all you can do right now. Again, just my take on it.
What a out Vanguard 529 plan? Our state plan Washington is not a true saving plan from my understanding. Also, are u required to go to a college in state of your plan?
I don't think the state of the school and the state of the plan need to match.
What do think about pre paid state Tution prog.? Thanks in advance .