VTI for college

[LivingAlmostLarge]

Do you think VTI is too risky for an investment for college? DKs are 5 and 7. I have them entirely in VTI and have been since birth for both. As we contribute $2k/year into an ESA we just have been buying VTI after we contribute to it. Nothing else. Right now the market is high and I'm about to contribute 2017 and 2018 for each so another $4k to each account. They have $14k and $22k respectively.

We won't need it another 10 years at a minimum. Would it be wrong to leave them aggressively invested for the next 10 years in VTI should I do it? I am about to move it from where it was to consolidate our investments to TD ameritrade.

So now would be a great time revamp the investments. I'm also looking at investing more into a 529 for them. I don't think I can do VTI in 529. We're thinking $10k each this year for 529 lump sum investment.

[Jluke]

I’m using VTI in my taxable account for college. My son is 4 so the investment timeline is 14 to 18 years.

With a 5 and 7 year old your timeline is similar since the money still has time to go grow from freshman year to senior year.

If you hold cash then that could be your “bond” portion if you want a different asset allocation. Or you could use CDs too.

What else would you consider adding and to which account? I spent last night thinking about this exact same thing. I considered vanguard balance index fund or the life strategy fund. Neither offers any rebalancing ability and you can’t choose to sell the bond portion or the stock portion since it is all in one fund.

[LivingAlmostLarge]

So I was thinking more about it. I was wondering about trying to do the 3 fund investment strategy for them. But I need to research what option are available in the 529 I'm interested in.

Mostly because I'm thinking of adding the $4k to the ESA Coverdell then $10k each to 529 this year. We happen to have a lump sum potentially more for each.

I'm hoping this should cover 4 years of college if we lump sum $10k now and what we have saved plus $2k/year for another 10 years? I'm not entirely sure. Maybe another $10k each so $20k lump sum is needed.

[Thrif-t]

Living, we're in the Ohio 529 and I always invested my kids funds in the Aggressive:

Age-based investment options:
2 separate age-based options are offered. The Vanguard Age-Based Option offers a choice among 3 different risk levels (Aggressive, Moderate, and Conservative). Contributions are placed into one of 5 mutual-fund portfolios corresponding to the selected risk level and age of the beneficiary, and reassigned to more conservative portfolios as the beneficiary approaches college age. The Advantage Age-Based Option invests in 4 distinct asset class portfolios made up of existing CollegeAdvantage equity and fixed-income options with funds from Vanguard and DFA. Asset allocation is based on the age of the beneficiary and shifts toward more conservative options as the beneficiary approaches college age.

[disneysteve]

Do you think VTI is too risky for an investment for college? DKs are 5 and 7.

We won't need it another 10 years at a minimum. Would it be wrong to leave them aggressively invested for the next 10 years in VTI

Couple of different questions here.

Is VTI a good investment for college? Yes, I think it is at this point.

Should you leave the college accounts fully invested in VTI for the next 10+ years? Personally I'd say no. I don't think the college account should still be 100% in stocks when your oldest is 17. That's too risky for my blood. I had my daughter's account in the aggressive age-adjusted portfolio and when she was mid-way through high school, I actually made it even more conservative. I wasn't taking any chances at that point.

[LivingAlmostLarge]

I am probably leaning to VTI in Coverdell and then doing a balanced portfolio in 529 because that's limited in investment options. Not sure which state yet.