Earlier this month, we made our annual contribution to our daughter's college 529 plan. This plan will be one part of how we will pay for our daughter's education. Since the contribution is a deduction on our 2012 state tax return, this was one of our final tax planning actions for this year.
At this time, about 1/3 is invested in various equity mutual funds; 2/3 was converted to cash during the debt ceiling cliff of 2011. 100% of the 2012 contribution was invested in a mutual fund. For 2013, I plan to increase the equity allocation to 50-60%.
Currently, we saved enough for one year of college. At the current rate of saving, we'll probably have about 2 years of costs saved by the time our daughter is 18. To get much higher than that will require a significant advance in the stock market, which doesn't look likely for now.
For more on Crossing Generations, check back every Thursday for a new segment.
This is not financial or college saving advice. Please consult a professional advisor.
Copyright © 2012 Achievement Catalyst, LLC
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