529 plan changes

cbee817 · August 2016

DD#1 is turning 6 in a few days and right now we have her 529 plan in an aggressive growth 100% stocks age based plan. Our state's 529 website says to switch to 75% stocks/25% bonds for ages 6-10. They're all vanguard funds: Vanguard Institutional Total Stock Market Index Fund, Vanguard Total International Stock Index Fund, Vanguard Total Bond Market II Index Fund, and Vanguard Total International Bond Index Fund. We are allowed to make changes twice a year.
Is it best to follow the path or wait another year and see what happens? We can also take new funds coming in (we auto transfer monthly) and move that to the new ages 6-10 option. Thoughts?

hoffse · August 2016

I would ask this on Bogleheads.

Personally, I would probably wait a year but I'm not very risk-adverse. That being said, I do think that we're long overdue for a serious correction. It might be a good idea to move some of that money to bonds for now.

jtmh2012 · August 2016

I like the idea of splitting the difference and putting the new stuff in the recommended funds. But I haven't read up on 529 mixes. I only have a < 2 yr old and a financial advisor to guide me.

cbee817 · August 2016

thanks @hoffse and @jtmh2012 - I moved future transfers to the age 6-10 funds and kept the balance in the ages 0-5 fund for now. College feels so far away but I don't want to mess this up for her by staying aggressive.. tough balance for sure.

jtmh2012 · August 2016

No problem.

I will add...I'm not sure if you have a financial advisor for other things, but they might be willing to help you with your mix. I have an advisor that I love that not only helps me with what she manages, but helps me keep our 401ks and some other things balanced with the overall portfolio.

cbee817 · August 2016

@jtmh2012 - we do not have an adviser. I haven't had much luck finding someone I feel comfortable with. We met with an AXA rep (through DH's work) and all he wanted to sell us was a whole life insurance policy. We have our own private term policies and ones through work as well... wasn't interested in anything different.
For my 401k, I go the easy way out and use a retirement date target fund with Fidelity (who my employer uses), our Roths are in a Fidelity managed fund (FAMRX), and DH's 403b is also in a target date type fund through AXA. We also have pensions- DH has one with the state and I have one with my employer (although mine keeps getting smaller and smaller). The girls' 529 are through the state's website because we get a tax break up to $5,000/year per account. Everything else is in CDs/savings account for now- I definitely would love to get more professional advice- just can't seem to find the right person.

jtmh2012 · August 2016

cbee817 said:

@jtmh2012 - we do not have an adviser. I haven't had much luck finding someone I feel comfortable with. We met with an AXA rep (through DH's work) and all he wanted to sell us was a whole life insurance policy. We have our own private term policies and ones through work as well... wasn't interested in anything different.
For my 401k, I go the easy way out and use a retirement date target fund with Fidelity (who my employer uses), our Roths are in a Fidelity managed fund (FAMRX), and DH's 403b is also in a target date type fund through AXA. We also have pensions- DH has one with the state and I have one with my employer (although mine keeps getting smaller and smaller). The girls' 529 are through the state's website because we get a tax break up to $5,000/year per account. Everything else is in CDs/savings account for now- I definitely would love to get more professional advice- just can't seem to find the right person.

@hoffse might be a better help in that area than I. I just happened to get luck in that regard. At the time I worked for the school system in central admin and my boss had their rep come in. I was smart enough to take a moment to talk to her. She's not fee based, so I'm sure she gets paid out of the commissions/expenses on my funds, but I have found her to be fairly balanced. Having to replace her when she retires scares me.

als1982 · August 2016

cbee817 said:

@jtmh2012 - we do not have an adviser. I haven't had much luck finding someone I feel comfortable with. We met with an AXA rep (through DH's work) and all he wanted to sell us was a whole life insurance policy. We have our own private term policies and ones through work as well... wasn't interested in anything different.
For my 401k, I go the easy way out and use a retirement date target fund with Fidelity (who my employer uses), our Roths are in a Fidelity managed fund (FAMRX), and DH's 403b is also in a target date type fund through AXA. We also have pensions- DH has one with the state and I have one with my employer (although mine keeps getting smaller and smaller). The girls' 529 are through the state's website because we get a tax break up to $5,000/year per account. Everything else is in CDs/savings account for now- I definitely would love to get more professional advice- just can't seem to find the right person.

What about reading and teaching yourself about investing? I definitely used to champion target date funds, but we have made a ridiculous amount over the past two years buying individual stocks. We agree with @Hoffse and think a correction is on the horizon, so have started to play it a little more safe, but over the past year we've made 26% on our stock picks versus the puny amounts from our target date funds.

LillibetteV · August 2016

als1982 said:

cbee817 said:

@jtmh2012 - we do not have an adviser. I haven't had much luck finding someone I feel comfortable with. We met with an AXA rep (through DH's work) and all he wanted to sell us was a whole life insurance policy. We have our own private term policies and ones through work as well... wasn't interested in anything different.
For my 401k, I go the easy way out and use a retirement date target fund with Fidelity (who my employer uses), our Roths are in a Fidelity managed fund (FAMRX), and DH's 403b is also in a target date type fund through AXA. We also have pensions- DH has one with the state and I have one with my employer (although mine keeps getting smaller and smaller). The girls' 529 are through the state's website because we get a tax break up to $5,000/year per account. Everything else is in CDs/savings account for now- I definitely would love to get more professional advice- just can't seem to find the right person.

What about reading and teaching yourself about investing? I definitely used to champion target date funds, but we have made a ridiculous amount over the past two years buying individual stocks. We agree with @Hoffse and think a correction is on the horizon, so have started to play it a little more safe, but over the past year we've made 26% on our stock picks versus the puny amounts from our target date funds.

Before we were married DH used to pick individual stocks and did pretty well. For me it's too risky and too much effort so I have been very pleased with index funds. The returns (so far) have been better than all of the actively managed mutual funds I traded them for and the expense ratios are WAY lower!

cbee817 · August 2016

@als1982 - any recommendations for teaching yourself about investing- blogs/books/etc? I'm in agreement with @LillibetteV - I worry about taking that much risk on myself like that, but it never hurts to be more informed. Once school starts up again, we don't have much time on the weeknights once I get home from work and the weekends are usually for laundry/cleaning/meal prep and trying to get in a fun family activity for the 4 of us.

hoffse · August 2016

I know I keep saying this, but read the Bogleheads investing forum for a little bit. The people who are on it are really knowledgeable, and they keep current with what's going on in the investing world.

They are slanted toward Vanguard (since Jack Bogle founded Vanguard), but overall it's probably the best-informed group of people on the internet when it comes to investing. The general consensus seems to be 1) invest, 2) learn do it yourself, 3) keep it simple and don't try to beat the market, 4) manage your fees, 5) FIRE.

That being said, even though it's Jack-Bogle-inspired, you still get plenty of debate and differing opinions. There is also a really large number of millionaires floating around on those forums, most of them self-made, who are looking to receive and dispense advice about wealth management and wealth building. Many of them are also really frugal, because that's what got them to a million so quickly.

I like it.

Here is a link to the general investing forum:
https://www.bogleheads.org/forum/viewforum.php?f=1

Here is a link to a thread regarding saving for college (generally):
https://www.bogleheads.org/forum/viewtopic.php?f=1&t=196790

LillibetteV · August 2016

I regularly read The Simple Dollar (although I only read the posts by the original guy - the new writers are pretty terrible), Mr. Money Mustache, and Frugalwoods. All of them have the same method -save like crazy and keep the investments simple. I think most of the blogs I've read prefer Vanguard (except Frugalwoods), but I have been very happy with Fidelity.

als1982 · August 2016

cbee817 said:

@als1982 - any recommendations for teaching yourself about investing- blogs/books/etc? I'm in agreement with @LillibetteV - I worry about taking that much risk on myself like that, but it never hurts to be more informed. Once school starts up again, we don't have much time on the weeknights once I get home from work and the weekends are usually for laundry/cleaning/meal prep and trying to get in a fun family activity for the 4 of us.

I second Boogleheads and the Mr. Money Mustache forums. I also follow a lot of other random blogs on Twitter.

Personally, our stock strategy is focused primarily on stocks that have a long history and pay dividends (income stocks) like Disney, Johnson & Johnson, 3M and John Deere. Older established brands you likely have in your home. We also ocassionally buy stock in a company that we use or think has a bright future but don't yet pay dividends (growth stocks), examples of these in our portfolio include Amazon and Ulta.

529 plan changes

Re: 529 plan changes

Choose Another Board

Search Boards