529 Savings For your Kids

[DangerRanger]

The roll into a Roth is the kids Roth though right? Not yours?

yep, not a vehicle for your own investment

 

[ColPenguin]

I choose to do an utma for my two instead of the 529. I didn’t like the idea of it being locked into education. My thinking was if I can cash flow future schooling then I can give them that to help start their life. Then if they by chance start up something and end up not in school it’s not locked up.

Doing same thing for same reason. I don't want that money earmarked for school exclusively.

Tax incentives are always meant to incentivize certain behaviors. The incentive isn't worth it to take a long-term gamble on what happens to higher education 15 years down the road. The UTMA can still be used for education, will be a good start and there will be no strings attached.

 

[Maverick1]

I’m sure there is an awesome financial advisor but after interviewing a few I haven’t found one yet. Advisor that set up my 529 placed me in a target date fund for a 1 year old.

I’ve probably learned more about investing here and Reddit than anywhere else.

He is a financial advisor......

 

[SDHNTR]

Also they want to make it seem complicated to….get you to use an advisor.

It’s not complicated.

It’s not complicated, until it is.

 

[SDHNTR]

I’m sure there is an awesome financial advisor but after interviewing a few I haven’t found one yet. Advisor that set up my 529 placed me in a target date fund for a 1 year old.

I’ve probably learned more about investing here and Reddit than anywhere else.

Target date funds work for those who want to out minimal thought into the process. For those, it’s better than nothing. Set it and forget it. They also work for investors who think they can time the market and/or are a danger to themselves. That’s actually probably most investors.

But for those who want to have a direct hand in things, yes, there are better ways.

 

[LostArra]

The very best investment is to make sure your kids learn to read and not just texts and social media posts but real books.
By the time they are 18 there will be scholarship money on the table to supplement your savings.

Americans remain outraged by prescription drug prices but just accept the fleecing by colleges and universities that lack any form of price control. The creativity of the colleges to get more and more money should be listed in the Scam thread.

 

[z987k]

Target date funds work for those who want to out minimal thought into the process. For those, it’s better than nothing. Set it and forget it. They also work for investors who think they can time the market and/or are a danger to themselves. That’s actually probably most investors.

But for those who want to have a direct hand in things, yes, there are better ways.

They don't work for anyone due to the fees when broad market almost 0 cost ETFs exist that you can just dollar cost average.

If that's too much financial literacy for someone, idk what to tell them other than you're going to do very poorly in life, spend the 30 minutes to understand the most basic principals.

 

[getcervid]

They don't work for anyone due to the fees when broad market almost 0 cost ETFs exist that you can just dollar cost average.

If that's too much financial literacy for someone, idk what to tell them other than you're going to do very poorly in life.

I have seen target date funds trashed on here a couple times. There is a difference between any ‘ol target date fund and indexed target date funds, which can be very fine choices for people who don’t want to worry about rebalancing, and should be effective and satisfactory (generally) for everyone except the most aggressive of investors. Of course, personal finance is personal.

But sure, if you want to be 100% equities all the time or some other allocation, go make your custom mix of stocks/ETFs/bonds. I do and many on here do as well. But there are many fine offerings of indexed target date funds that would treat investors with acceptable returns and more palatable risk levels (less severe drawdowns, as they tend to mix bonds/international/domestic stocks). The below vanguard fund is cheaper than many U.S. stock ETFs like SPY or QQQ. It starts out at ~90% equites (53% US stocks and 37% International) and 10% bonds, which is not at all a bad mix.

 

[SDHNTR]

They don't work for anyone due to the fees when broad market almost 0 cost ETFs exist that you can just dollar cost average.

If that's too much financial literacy for someone, idk what to tell them other than you're going to do very poorly in life, spend the 30 minutes to understand the most basic principals.

oversimplified and incorrect