How do I allocate my 529 for two children?

I am saving money for two children who are heading for college. One will start this year, and the other will start in six years. I have saved approximately $20,000. What asset allocations would you recommend in these 529 accounts at Vanguard?


First, I have to say your children are very fortunate to have a parent who supports them in this way.

To address your question, I assume you have two separate 529 accounts, one for each child.

With a total of $20,000 saved for two presumably four-year college educations, I do not believe you can afford the risk of losing what you have set aside. Some people might be tempted to invest in equities for a student, who is starting this year, in the hope of growing those savings over the next three years.

However, I believe you should expect any growth in that account to come from additional savings you can add, not from market gains. (more…)