What income investment strategy would you use for $200K which will be used to pay for college during 2026-2030?

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    Megan

      So we just sold a home and netted $200K which will be used for my kid’s college. They are currently a freshmen in HS so won’t need the money for another 3 years and then need $50K a year for a further 4 years.

      Currently, it’s sitting in a Vanguard MM account earning 5% but I don’t think that will last will it? So what would you do knowing it can’t be invested in stocks only fixed income instruments and it all has to be there in 3 years onwards!

      #82353 Reply
      Jake

        Sounds like you already have the $ needed for all 4 years which is a good thing from an investment perspective (don’t need to invest aggressively to meet your goal).

        You could front load a 529 with $85k and invest it conservatively just so the earnings are tax free for year 3&4. Where you have it now, the interest is taxable. With the remaining 115k you could do a CD or bond ladder maturing each of the first few years of tuition.

        #82354 Reply
        Sean

          529 is reasonable if you get any tax break in your state. Otherwise hysa, MM is fine. Or CDs if you can find some decent rates, treasuries possibly.

          #82355 Reply
          Don

            1-4 years HYSA, 5+ years ESA or 529 or UTMA.

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