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saving for college

By Terry Savage on April 09, 2023 | College Savings / Student Loans

We are grandparents of a 14-year-old and have been saving for his college in a 529 fund. Now we are getting anxious that this might not be the best way to save for his college. We have roughly 39k in it. What would you recommend for future investing until he is 18 that is safe? His mother puts $700 each month directly into the 529 as well. Would you advise her to continue or to go into a savings account at a bank? I have a treasury direct account, have been buying T-bills and inflation-protected bonds, and am familiar with buying bonds.

Terry Says

I would definitely keep contributing to the 529 plan — BUT now that he is getting closer to college, you don’t want all that money exposed to college. He will need it within 8-10 years. So look at the CHOICES INSIDE the plan. Immediately switch to the most conservative investment choices.
And, since you understand the T-bill market, you can keep building funds there and use them if you don’t want to withdraw from the plan in a down year. They can be made as a gift directly for tuition, without counting as much against financial aid for your grandchild.

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