[Music] okay, we do have a question queued up from Vicki. Ready for it? Yes, ma'am. All right. She says, Is it better to save cash for college once kids reach a certain age? For context, we are finally at the point where we can put money aside for college, which is awesome, but their oldest is 14, so they don't have quite as much time for that compounding growth in, you know, a 529 or something like that. What would you say to parents in that situation? You know, I get this surprisingly. I actually get this question all the time. It makes sense. Yeah. Do I even need to do a 529? Is it even worth it? And this is what I tell people. First of all, Vic, you need to look at your state. Is there an incentive for you to make contributions to your 529s? Like, if you live in the state of Georgia, even if you only have a short time period, you get a state tax deduction for putting money into the 529. So, number one

that's like something you should look at, but number two, why do we like 529 assets? Why are they valuable? Well, because you can put the money in, and it can grow tax-deferred. And if you use it for qualified educational expenses, it's completely tax-free when you pull it out. So, even if you only put it in for one year or two years, and it is even in like a very conservative age-based investment option, and you make 5% or 6%, that's still 5% or 6% that's tax-free. So long as it's not incredibly cumbersome to open the account and pay the money out. And like at 14, you got to think, I've got four years until my kid starts college, but there's also going to be another four years while they're in college. That's like an eight-year time horizon. I would call that like medium to intermediate term. I don't think it's crazy. Now, if your child was 17 or 18 about to start their freshman year, is it

Make sense to fund to 529 maybe not, but I think even with three, four, five years out, I don't think it's crazy to do it. You just got to figure out how much makes sense and how logistically difficult will it be to get the dollars in there. Agree, disagree? No, I thought you covered a lot. You had tax benefits. I was go check your state. Saving for college.com used to be a great resource for that if you're looking for some place to go check it out. The I immediately, and I love that you just did what you said. You said if you add on the four years that they are like four to five years they're in school, you might be at eight to nine years time horizon here. And I don't know if it's a human condition where we always think in binary terms, is it's zeros and ones, meaning that I'm either going to go cash or I'm going to go wide open. That fortunately in finance, you don't have to.

be binary with your decisions. You can actually be what we call diversified, and there's nothing wrong with you. Yes, now with four years, you know knowing that some of that, a portion of that money is going to need to be ready to serve and actually pay for the college in four years. You probably want that to be somewhat conservative 'cause that's definitely short to midterm in its time horizon. But as Bo shared that Junior and Senior year, that's clearly long-term. So why couldn't you have a little diversification going on where you have some equity investments for those years and then every year, but it's got to put you, it's got to give you homework, it's going to be on your shoulders to make sure that you are dialing down that risk profile. Now look, you probably could go ahead, a lot of 529s do have age-based programs. One, somebody in the chat just said, Hey, what if I put the money in and the market

drops 30%. Yeah, and I don't mind sharing that. You know, I put my daughter's, my oldest daughter, is a junior in college now, or rising junior, goes back in like 3 weeks. And it's interesting to me, CU. I did the age-based 529 option for her. It does get pretty conservative pretty quick. I will tell you that. But if you don't feel comfortable taking that, handling that responsibility, you can choose the age base. They're going to dial down the risk appropriately through that glide path. But if you want to look at this, break it into what's short-term goals, what's mid-term, and what's long-term, and invest accordingly through diversification, I think that's great.

Save for College Now or Wait? (Our Oldest Is 14—What’s the Best Strategy?)

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