I see a lot of questions on here like:
“Where should I invest my money?”
“Should I max out my 401k?”
I haven’t seen anything (at least recently) on 529s and other educational savings accounts (e.g. Coverdell). Any views on those types of investment vehicles? Trying to think through all of the different options available.
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my views on them are completely dependent upon the circumstances. for example, if someone's underfunded for retirement, forget 529s and CSAs, but if you're putting away ample for yourself and the kids are young, go right ahead
Agreed, makes sense. I guess I’m coming from the angle of an on-pace retirement fund with additional cash on hand. Also, no kids currently but expecting them down the road. Given the circumstances, does it make sense to take advantage of the tax benefits with the 529 plan vs a brokerage account or other avenue? Trying to weigh if it makes sense to tie up funds in a 529.
I personally wouldn't do it until you had kids
What are some guidelines on retirement saving? If you're getting an average annual return at the market rate, it's not that hard to be well funded for retirement.
if your retirement is hinging upon markets repeating the last 40 years of returns, I've got a bridge to sell you
the level of returns you get is completely outside your control, so I don't assume that returns continue the way they have been
because of this, I recommend people save at least a quarter of their income for the long term ("retirement" is a fluffy concept so I prefer to chase financial independence). me personally? I save 30-50% of my income because I have no idea what's coming and what I do have control over is my lifestyle. I've written about this elsewhere but I think banking on historical stock market returns is a foolish assumption, you have a binary outcome which isn't great - either you're as you've planned or your worse off. whereas if you're living significantly below your means, your binary outcomes are as follows - either things go as expected (poorly) and you're prepared, or things go better and it's just gravy. father time doesn't give a fuck about average S&P returns, so while I'm confident in the stock market and am 100% invested there, but I don't want something outside of my control to force an uncomfortable lifestyle adjustment in 30 years, I'd rather manage my lifestyle throughout and arrive at financial independence come what may
OP here - Can I ask why you wouldn’t? If you’re planning on having children and will incur educational expenses, doesn’t it make sense to take advantage of the tax benefits of a 529?
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