Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Need Advice on Education Funds
Old 10-04-2018, 12:25 PM   #1
Dryer sheet wannabe
 
Join Date: Oct 2018
Posts: 11
Need Advice on Education Funds

Good afternoon all,


I have been lurking for a few months and this is my first post on the site. There is a wealth of information here and I look forward to reading more as I near FI in the next 5-10 years.


For now, I have a question regarding funds I have set aside in a college savings account for my daughter (Coverdell). I setup the account around 10 years ago and talked with an advisor at TD Ameritrade yesterday and he said that from a risk perspective the funds we own in the account rate at an 8.5. Given that my daughter started college a couple months ago and we will need the money over the next 3.5 years, I need to get this into a more conservative fund(s). The TD Advisor told me they can't recommend a specific fund, but gave me info on how to search their site to find mutual funds and he recommended 25/75 allocation.


The problem is that I can't find a way to search based on AA and I am thus struggling to find something suitable. I have enough money in the account to fund my daughter's 4-year bachelor's degree so I am interested in preserving what I have now, but would like to take advantage of growth over the next 3.5 years if I can find something that isn't too risky.



Do you have any recommendations on some mutual funds that would get me this type of AA, or any other recommendations as I move forward and get this into a more conservative fund?

Thanks
scottmn4 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-04-2018, 02:05 PM   #2
Recycles dryer sheets
 
Join Date: May 2011
Location: Austin
Posts: 354
You are deploying the fund now, so AA should be more close to 0/100. I would do simple CD ladder.
HillCountry is offline   Reply With Quote
Old 10-04-2018, 03:13 PM   #3
Full time employment: Posting here.
 
Join Date: Nov 2016
Location: Fargo
Posts: 526
0 to 20% stocks max.

To get growth you risk loss. Markets do not always go up.

100% Short term bonds for our college freshman daughter. Saved enough. No need to risk.
bloom2708 is offline   Reply With Quote
Old 10-04-2018, 04:05 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 28,529
Quote:
Originally Posted by scottmn4 View Post
....The problem is that I can't find a way to search based on AA and I am thus struggling to find something suitable. I have enough money in the account to fund my daughter's 4-year bachelor's degree so I am interested in preserving what I have now, but would like to take advantage of growth over the next 3.5 years if I can find something that isn't too risky. ....
Since you will need to use this money over the next 3 1/2 years, I would not put any in equities, especially with markets at or near all-time highs. I like the idea of a CD ladder or even a short-term bond fund or money market fund.

If you really want equities then buy 25% equity index funds and put other 75% in CDs or a short-term bond fund.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 10-04-2018, 04:09 PM   #5
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
I had mine all in CDs, even though I was paying out of our income. I didn’t want to risk it for relatively short term.
Fedup is offline   Reply With Quote
Old 10-04-2018, 04:45 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Jul 2002
Posts: 1,358
Last two years of HS, with college in near future, I had 20% in equities and 80% in short term bond funds. With the rising interest rates, I felt I would likely lose money with the bond funds, and moved all funds into a stable value fund (and too short of time period to gamble with equities). These funds are in 529 plans. Currently in Colorado's plan, but looking to move them to Utah 529 plan.

Son's are currently a junior and a sophomore.

See https://www.savingforcollege.com/art...-plan-rollover for pros and cons of moving Coverdell to a 529 plan
RE2Boys is offline   Reply With Quote
Old 10-08-2018, 09:08 AM   #7
Dryer sheet wannabe
 
Join Date: Oct 2018
Posts: 11
Thanks for all the responses. I went ahead and sold the mutual funds I had in the account and will leave it in MM until all the funds are used.
scottmn4 is offline   Reply With Quote
Old 10-08-2018, 09:47 PM   #8
Full time employment: Posting here.
Al in Ohio's Avatar
 
Join Date: Jun 2013
Location: Columbus
Posts: 911
Quote:
Originally Posted by HillCountry View Post
You are deploying the fund now, so AA should be more close to 0/100. I would do simple CD ladder.


I just put my oldest through and my youngest is a senior in HS. Once they start college or are a year away I highly recommend getting entirely out of the market and using laddered CDís or having no more than 25% of your AA in the market. If you hit a bad bear market when they just get started you want at least three years of savings unaffected by it. Can take that long for recovery. Otherwise you risk their education.
__________________
Ohio INTJ ENG ER as of 2016
Al in Ohio is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Millennials-Advice to break through the road blocks of high cost of education Luck_Club FIRE and Money 79 02-25-2017 08:03 AM
Unemployment ending -- need to withdraw to finance education doraflood FIRE and Money 31 03-14-2011 07:12 AM
(FAQ archive): Invididual Stocks vs. Funds/Active Funds vs. Passive Funds Nords Early Retirement FAQs 0 10-22-2007 03:07 PM
Really need your advice- $20K to invest, Munis, ETFs,REITS, or Index Funds Foodeefish FIRE and Money 5 01-06-2007 03:34 PM

» Quick Links

 
All times are GMT -6. The time now is 02:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.