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When do you start becoming conservative with 529 accounts?
Posted on 5/5/24 at 8:14 am
Posted on 5/5/24 at 8:14 am
My oldest is in 6th grade. Currently have her in a mix of large/mid/small cap and total stock market. All Vanguard funds. I have coworkers who lost significant gains 2008-2009 when their kids entered college. I'm very weary of the current financial status and economic outlook of the country. Should I just continue and don't look at it until another 3-4 years, or start moving these funds into bonds/cash/value? 529 accounts are a little trickier with a shorter timeline in the market.
Posted on 5/5/24 at 8:41 am to Crescent Connection
I started with the age based strategy, where it automatically pulls back and becomes more conservative after certain age milestones, starting with their 9th birthday. I have a nice chunk so far, so I reduced that strategy and added a little more risk. My thinking is the conservative strategy will get me through 3 years of college, adding to a recovery timeline when I actually need the remaining funds.
You should pull back on at least a portion of the investment.
You should pull back on at least a portion of the investment.
Posted on 5/5/24 at 9:42 am to Crescent Connection
Depends how funded you expect to be.
Posted on 5/6/24 at 8:49 am to Crescent Connection
Even in worse case scenario (if today is October 2007), the market fully recovered within 6 years. I think if the pending recession - you know, the one that should've happened in 2018, 2020-2022, etc. - doesn't happen soon, yes, I'd reduce risk fairly significantly. However, if it does happen soon, I would just keep plugging away.
The problem with the LA START age-based funds is they move your funds based on age, not on market cycle. So in the example someone else gave, they could take the entire drawdown of a recession and then because the kid turns 16, it automatically moves all to cash. Literally exactly what you're not supposed to do. If anything, a 50% drawdown you should move 100% to Total Market.
The problem with the LA START age-based funds is they move your funds based on age, not on market cycle. So in the example someone else gave, they could take the entire drawdown of a recession and then because the kid turns 16, it automatically moves all to cash. Literally exactly what you're not supposed to do. If anything, a 50% drawdown you should move 100% to Total Market.
This post was edited on 5/6/24 at 8:52 am
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