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How are you managing your 529

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  • Miss Bonnie MD Miss Bonnie MD 
    Participant
    Status: Physician
    Posts: 497
    Joined: 02/14/2017
    medical school scholarship sponsor

    I use NY (and live in NY) so get a tax benefit. I did a custom allocation to be aggressive (100% equities). They use Vanguard funds.

    "Being rich is having money; being wealthy is having time."

    Miss Bonnie MD --> Wealthy Mom MD @ http://wealthymommd.com

    #39834 Reply
    Liked by Lordosis
    Avatar FIREshrink 
    Participant
    Status: Physician
    Posts: 983
    Joined: 01/11/2017

    Originally we lump summed prepaid tuition x 5 years each at or before their birth. Those plans changed and we transferred the assets to NY due to their very low costs. 100% stocks though, all index funds.

     

    Separately we have 529 assests in NV and UT, and like WCI we invest very aggressively, 50% DFA funds at UT as that is their cap. The rest in TISM and large cap US Value.

     

    When my oldest gets to mid-late middle school I will dial back the risk.

    #39944 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4469
    Joined: 05/13/2011

    Ok… i’m trying to learn something here please as an intern ?
    Reviewing the UT 529 website; their “age based aggressive domestic plan” invests in VG TSMI which had a 3 years return of 9.75%; while both VG and DFA small value had less return over 3 years (9.58% & 6.66%) and come with higher expenses. Why to carry more risk and expenses if there is no much difference in return? Thanks

    Click to expand…

    Ah ha! You’ve noticed the difference between expected return and actual return. Try lengthening the time period of analysis and instead of looking backward look forward. Not so easy to pick the winner now is it?

    Don’t choose your investments primarily based on past return. You can’t choose your prospective strategies by their outcome. Once you have the outcome, it’s too late to choose the strategy.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #39946 Reply
    Liked by chrisg202
    Avatar chrisg202 
    Participant
    Status: Physician
    Posts: 64
    Joined: 01/16/2016

    Ok… i’m trying to learn something here please as an intern ?
    Reviewing the UT 529 website; their “age based aggressive domestic plan” invests in VG TSMI which had a 3 years return of 9.75%; while both VG and DFA small value had less return over 3 years (9.58% & 6.66%) and come with higher expenses. Why to carry more risk and expenses if there is no much difference in return? Thanks

    Click to expand…

    Ah ha! You’ve noticed the difference between expected return and actual return. Try lengthening the time period of analysis and instead of looking backward look forward. Not so easy to pick the winner now is it?

    Don’t choose your investments primarily based on past return. You can’t choose your prospective strategies by their outcome. Once you have the outcome, it’s too late to choose the strategy.

    Click to expand…

    Got it… that’s my new pearl this week 🙂

    Thank you!

    #40046 Reply
    Osiris Osiris 
    Participant
    Status: Physician
    Posts: 55
    Joined: 01/25/2016

    We paid for our child as college  happened.

    We now have a 3 month old grandchild and decided to fund the 529 with $140,000 ( $ 70,000 by each grand parent) and we decided on the Utah 529. We are going for customized option of the 25 % DFA US small cap value, 25 % DFA international Value and 25 % Vanguard  small value index fund and 25 % Emerging market fund Vanguard.

    We do not manage it. We are going to set it and forget it. We roll the dice and I have a good feeling that  small value, Value and Emerging markets will win out.

    If we are still around in 18 years and the markets are not cooperating we hope we have enough to pay for college out of cash flow and let this bet run.

    What is a cynic? A man who knows the price of everything and the value of nothing.
    Oscar Wilde.

    #40272 Reply
    Rogue Dad, M.D. Rogue Dad, M.D. 
    Participant
    Status: Physician
    Posts: 972
    Joined: 03/07/2016

    I live in MO but switched to the Utah plans a few years ago because of access to better funds.  MO still gives a state tax break for using out of state plans, so we don’t lose anything but using an out of state plan.

    I have it set up using a custom age based progression that I found online awhile ago and liked; it’s fairly aggressive all the way until college.  I have 3 kids and am not really worried about overfunding, because by the time the 3rd one is in college I’ll know whether I have money leftover from the first 2 and can just shift money over accordingly (and stop funding #3).  I’m also not worried about overfunding because I’m not putting in anywhere near enough to overfund it.  🙂

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #40290 Reply
    Liked by Lordosis
    Avatar NeedFixBone 
    Participant
    Status: Physician
    Posts: 1
    Joined: 03/20/2017
    Earnest refinancing bonus

    May I ask a two part question?

    I have 3 kids (7,5, almost 2) and currently two advisor-opened VA 529 CollegeAmerica plans, currently both in Target Date Funds.  I am on the verge of firing this advisor (he doesn’t know it yet…) since he rolled my previous 401K into a variable annuity.  😡 .  My finance knowledge has definitely been upgraded (big thanks to WCI and PoF) but I’m still a newbie.

    Question 1: the Advisor VA 529’s seem to have reasonable ratings on http://www.savingforcollege.com, but I really want to take back control.  Can I/should I change these to a different state plan?  Note: live in Arizona, they give a state tax credit for ANY STATE’s 529.

    Question 2: I’m going to open a 529 for the littlest one (my wife would be happiest if I did that today).  I have been eye-balling the NY plan.  Does this seem reasonable?  Am I missing pertinent details?

    Thanks Everyone.

    #40580 Reply
    WallStreetPhysician WallStreetPhysician 
    Moderator
    Status: Physician
    Posts: 226
    Joined: 01/15/2017

    Our 529 Plans for our boys (now 6 & 8) are invested in the 100% Global Equity fund (70 / 30 US / Int’l).

    When the recipients are closer to college age, it might be a great idea to include them in the decision-making as to how the money is invested. Show them this is how much you have. Use it how you see fit (public v. private) and invest it in a manner that you’re comfortable with. It would lead to many good money conversations at an important time.

    Click to expand…

    I have the exact same allocation – 100% in the “Global Equity Index Option”. I’m in a different state as PoF, so mine is 70% US Stocks, 25% International Equity, and 5% Emerging Markets.

    Former Wall Street trader, current physician and blogger @ http://www.wallstreetphysician.com
    "As Gordon Gekko might say, 'Fees never sleep'" - Warren Buffett

    #40582 Reply
    Avatar MichaelB 
    Participant
    Status: Physician
    Posts: 69
    Joined: 02/15/2016

    May I ask a two part question?

    I have 3 kids (7,5, almost 2) and currently two advisor-opened VA 529 CollegeAmerica plans, currently both in Target Date Funds.  I am on the verge of firing this advisor (he doesn’t know it yet…) since he rolled my previous 401K into a variable annuity.  ? .  My finance knowledge has definitely been upgraded (big thanks to WCI and PoF) but I’m still a newbie.

    Question 1: the Advisor VA 529’s seem to have reasonable ratings on http://www.savingforcollege.com, but I really want to take back control.  Can I/should I change these to a different state plan?  Note: live in Arizona, they give a state tax credit for ANY STATE’s 529.

    Question 2: I’m going to open a 529 for the littlest one (my wife would be happiest if I did that today).  I have been eye-balling the NY plan.  Does this seem reasonable?  Am I missing pertinent details?

    Thanks Everyone.

    Click to expand…

    Wow- your advisor should be fired for rolling a 401k into a variable annuity.

    As far as the 529-   I have the NY plan and have been very happy with it. The fees are much lower than the VA plan. As far as I know you can move the VA plan to NY- the NY plan people should be able to help you with that.

    #40616 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1729
    Joined: 01/08/2016

    your advisor should be fired for rolling a 401k into a variable annuity.

     

    Click to expand…

    Fired?  How about tarred-and-feathered?!

    #40618 Reply
    Liked by MichaelB
    Avatar jenny2k 
    Participant
    Status: Dentist
    Posts: 3
    Joined: 05/07/2019

    I just fired my financial adviser and have moved everything except my son’s 529 plan.  The plan has just under 90K and is invested in 4 high risk, underperforming Ivy funds that carry an expenses ratio of 1.0 to 1.3.  He is 4 years away from college.  I have two other 529 plans (Utah and New Hampshire) with approximately 120K in them.  Should I just keep the money invested with Ivy and use it first or should I move it to a more fiscally responsible and less risky options?  I agree with Dr. Mom that the age-based options have worked well with my Utah and New Hampshire plans.

    #220086 Reply
    Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 658
    Joined: 06/18/2018

    @jenny2k
    The plan has just under 90K and is invested in 4 high risk, underperforming Ivy funds that carry an expenses ratio of 1.0 to 1.3…Should I just keep the money invested with Ivy and use it first or should I move it to a more fiscally responsible and less risky options?

    That’s rhetorical, right? I mean, I guess if you want 8 more years of his expenses and poor performance you could leave it there, but…

    #220098 Reply
    Liked by MaxPower, ENT Doc
    Avatar DCdoc 
    Participant
    Status: Physician
    Posts: 535
    Joined: 06/14/2016
    alpha investing

    We do the highest amount we can in the UT DFA small cap because all 3 of our kids are under 3, I like DFA (and only have access to DFA funds through the 529 – I won’t pay a AUM fee to get access through other accounts), and want to be as aggressive as we can when they are so young. We’ll dial it back and shift into bonds as they reach HS age.

    #220113 Reply
    Liked by FIREshrink
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1604
    Joined: 02/11/2019

    I have 4 kids. NY plan and we love in NY. Saves us $650-700 in state taxes. I put 1k a month split amoung the 4. Plus a portion of bonuses or windfalls. Plus anything given to them as gifts. Set to the aggressive portfolio. Not aged based because that gets conservative too fast. I will likely leave it aggressive until my last is 5-6 years away from college. Plan is to be enough to pay 50-75% of a state school cash flowing as needed.

    “Never let your sense of morals prevent you from doing what is right.”

    #220151 Reply
    Liked by jenny2k
    Avatar jenny2k 
    Participant
    Status: Dentist
    Posts: 3
    Joined: 05/07/2019

    Thank you for the reply.  I just needed a nudge in the right direction and apparently, I already knew what I needed to do.

    #220405 Reply

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