What is your 529 invested in?

[ohgillian]

My kids' 529s are invested in age-based portfolios at Vanguard, and I think they're too conservative for me. What do you invest your 529s in? I'm thinking about maybe a bond index and 1 or 2 stock indices, but more heavily weighted to stocks.

FWIW, here are the compositions of the vanguard age-based plans by target college enrollment year; link at bottom for source info


2038/2039 Enrollment: Stocks 95% Bonds/Reserves 5%

2036/2037: 92/8

2034/2035: 84/16

2032/2033: 72.50/ 27.5

2030/2031: 60.5/39.5   <----my 8 year old is here. 

2028/2029: 52/48  <----my 11 year old is here

2026/2027: 40.45/59.55  

2024/2025: 26.79/73.21

2022/2023 19.82/80.18



personal.vanguard.com/pdf/529progdesc.pdf

[winemaker06]

I had the same problem with the age-related fund and ultimately moved everything to an S&P 500 fund, so basically the most risky option. My kids are 5 & 7 and I’ll be leaving it there for another 3-5 years at least. I agree that looks super conservative but kind of understand when you get within a 10-year timeframe.

[sandandsea]

We have them in age based funds. One kid is 9 and the other is 5 and the funds are about 60/40 between them now. Mostly due to age. I don’t worry about them really and just ignore it and leave it alone as we don’t have time/mental space to do anything different.

[shaynaatl]

Ours are 7 and 4, and we are in 100% stocks in both.

[ohgillian]

Sorry I forgot to come back to this thread (even though I read the replies as they were posted). I just needed to think it out and it was helpful to see what other people are doing.

This past weekend I took them out of their target funds and put both into a 4-fund portfolio invested 80/20. I could probably go more aggressive, but I am reluctant to, I think, at these ages. Switching the fund mixup was easy but I was surprised to see you can only do that twice a year. I mean I don't plan to do it even that often, I just didn't know there were restrictions.

[awkwardpenguin]

We plan to draw down the 529 funds to pay for college (so short-ish time horizon) and consider them separate from our overall AA based on our personal risk tolerance and time horizon. Therefore, the age based allocations seem appropriate to me, since they get more conservative closer to the time we need to withdraw them.

[niq]

The part that's in a 529 is in an "aggressive age-based allocation", so I think it's 80/20 until they're 10 or 14, and then it goes down to being fixed income when they turn 18.

[mlkgls]

Is it terrible to say I have no idea? We’re in the Utah age-based moderate, but beyond that I’m not sure.

We still have 9 more years and I’m wondering if the aggressive model would be a better choice. Ideally I would like to cash flow the earlier years as much as possible to allow for continued growth, although maybe it won’t matter as much then because of how conservative the investments will be?

[ohgillian]

Aug 17, 2021 20:38:54 GMT -5 mlkgls said:

Is it terrible to say I have no idea? We’re in the Utah age-based moderate, but beyond that I’m not sure.

We still have 9 more years and I’m wondering if the aggressive model would be a better choice. Ideally I would like to cash flow the earlier years as much as possible to allow for continued growth, although maybe it won’t matter as much then because of how conservative the investments will be?

So, this was me too until a month or so ago, hence my OP.  I was surprised to see just how conservative the age-based was. It looks like you may be at a 65/35 split:  my529.org/age-based-moderate/ 

If you plan to cash flow the earlier years (which makes sense to me if you plan to cash flow part of it), then you have a bit more time, which may mean you want to revisit your allocation. Or not. It's hard to balance the risk of not earning enough vs losing needed funds.

[mlkgls]

Aug 18, 2021 9:04:16 GMT -5 ohgillian said:

Aug 17, 2021 20:38:54 GMT -5 mlkgls said:

Is it terrible to say I have no idea? We’re in the Utah age-based moderate, but beyond that I’m not sure.

We still have 9 more years and I’m wondering if the aggressive model would be a better choice. Ideally I would like to cash flow the earlier years as much as possible to allow for continued growth, although maybe it won’t matter as much then because of how conservative the investments will be?

So, this was me too until a month or so ago, hence my OP.  I was surprised to see just how conservative the age-based was. It looks like you may be at a 65/35 split:  my529.org/age-based-moderate/ 

If you plan to cash flow the earlier years (which makes sense to me if you plan to cash flow part of it), then you have a bit more time, which may mean you want to revisit your allocation. Or not. It's hard to balance the risk of not earning enough vs losing needed funds.

I’m not sure why I’m struggling with this decision. I have no problem choosing the “aggressive” allocation for retirement and I feel sure the age-based Aggressive grows more conservative over the years. 

[ohgillian]

Aug 19, 2021 19:23:41 GMT -5 mlkgls said:

I’m not sure why I’m struggling with this decision. I have no problem choosing the “aggressive” allocation for retirement and I feel sure the age-based Aggressive grows more conservative over the years. 

I don't know about you, but I think for a lot of people, college funding just gets caught up in so much emotion and fear -- you feel worse about many of us feel worse about maybe not providing for our own kids than we would about not providing for ourselves. So the fear of making the wrong choice seems greater when it comes to college funding. At least for me. But it's also fair to say that the horizon is a lot shorter for college! So this balance of the emotion and the math, that's not easy. Just my 2¢.

[farmvillelover]

Aug 17, 2021 12:48:20 GMT -5 niq said:

The part that's in a 529 is in an "aggressive age-based allocation", so I think it's 80/20 until they're 10 or 14, and then it goes down to being fixed income when they turn 18.

Same. They’ve done well over the past 10 years.