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Shifting 529 Money between children for maximal growth

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  • Shifting 529 Money between children for maximal growth

    I'm in NY and have 529s for each of my 3 kids (2 in Jr high and 1 in elementary). I invest $400/mo/kid in the accounts and each kid started with some seed money. I use vanguards plan which changes your investment strategy to be be less aggressive as the kids get closer to college. Based on some of the online calculators my first 2 kids are overfunded and the 3rd may have a shortfall. Since my 1st 2 kids are older they have less aggressive investments. Is it worth it to shift some 529 money from the older 2 to the younger one to maximize growth?

  • #2
    They are all in the same generation so you can roll the assets between those 3 accounts without taxes or penalty.

    I moved my 529 assets from the target date funds to a fixed equity/bond fund. NY has a 75/25 fund and a 100 equity fund. Pick those if you want a more aggressive allocation.


    • #3
      If you are way overfunded you can shift the money between but alternatively you could just stop funding the older kids accounts and throw more money at the younger kid until he catches up.

      I use the NYS plan as well and I was super excited when I got that email last week that the expense ratio is dropping from 12 to 11 basis points