Can I sign up for private 529 plan after my son is admitted to private college

Paying for College
1

My child will be going to private college, given inflation the fees will increase by 4th year, does it makes sense to signup for private 529 plan. The plan has 36 months vesting period so I can only plan for fourth year and beyond.

I am in CA so no state benefit, he is my last child who may decide to do Masters so intention is to use the money for the fees of last year. I am not looking for growth just looking for options to lock the fees for fourth year and for Masters program

Is this possible ? did anybody explore this option ? If yes then what amount should I plan to put, may be $2k(the plan needs $500 minimum)

2

Yes, you can but with a short timeframe and you are not looking for growth, why would you?

You’re better to take your money and buy a 1 year CD and rollover or a 5 year CD.

Yes, you’ll pay taxes on the income but you’ll have an assured return and without the admin fees of a 529.

4 Likes
3

It probably depends on how much you want initially invest. You could also look at a higher interest money market fund for now. When you reach a certain level buy a CD or CD ladder.

If there’s any money left over then maybe look at a 529.

4

So you’re essentially looking to hedge against (approximately, using historical data) 4.6% annual COA increases over the next 3 years. Interest rates on 3 year treasury bills are just about there and AAA corporate bonds rates are higher. So I agree with the posters above that you could simply just invest this money.