[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!

[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.

[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.

[Don]

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

[Author]

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