investing for private school?

[norisk]

What is the best way to invest for private school?
I just sold a house and cashed in on 140K, I need to pay 20K for the next 7 years starting next august (2015). What is a reasonable way to invest this, so I can withdraw 20K every year, plus have some growth to allow for inflation of tuition.

Thanks
Norisk

 

[FUEGO]

Something with no risk. You have a fixed series of obligations. CD ladder, inflation linked bonds, something like that.

Personally, I'd take a shot on year 6 and/or 7 tuition and stick some or all of those funds in the market, keeping the years 1-5 money in no risk investments. Assuming I had some back up funds in place in case the market doesn't go up within 6 years.

 

[LOL!]

K-12? or College?

K-12, one can use an Education Savings Account, but the contribution limit is low, something like $2,000 a year. I'd invest in a Vanguard LifeStrategy fund and just go with it.

College: 529 plan.

Note that one can give lots of money to the kid who can earn something like $2,000 tax-free from investments each year, so just just giving some money to kid to invest each year and cashing it in before gains are more than $2,000 and reinvesting could be worthwhile.

But, there will not be big gains unless one takes big risks. If the money does not gain or if there is a small loss, would that be a problem? Or would normal cash flow pay for education?

Vanguard LifeStrategy Moderate Growth would be OK if one if comfortable with risk.

 

[norisk]

it is K-12, actually will be 6-12.

what does this mean exactly?

Note that one can give lots of money to the kid who can earn something like $2,000 tax-free from investments each year, so just just giving some money to kid to invest each year and cashing it in before gains are more than $2,000 and reinvesting could be worthwhile.

with CD rates so low, I am looking for something that hopefully may be a little higher than CD rates, but lower risk than market.

Does anyone have any experience with structured products? Like those CD-type things that have some downside protection and upside potential? Of course there is no free lunch, I understand, but just checking if there is something our there that I might not know about.

Thanks again.