I'm trying to decide on how to invest my 3 year olds money for college. I'm looking at the Trowe price 529b plan returns vs a standard S&P index fund. The target date funds for a student graduating in 2018 returned a 4% return for 3 years and 6% for 1 year. The 2021 target fund is better with 12% for 1 year and 6% for 3 year. I understand the funds have less risk the closer to college, but i'd hate to miss out on the recent returns.
Looking at mutual funds and ETFs, the return rates for a year are from 15-30%. Most 3 year returns are over 9%
The difference in these rates of returns makes up the difference for paying taxes and also having the flexibility of using the money for whatever they want.
What are the arguments for this type of thinking? In this situation a Custodial makes sense.
Submitted March 04, 2018 at 11:30PM by Fishfortrout http://ift.tt/2Fdnlvy
