One of my clients was blessed early in 2008 with two new grandchildren. As he had done for his previous three grandkids, he opened 529 college savings accounts for the two newest family members, with initial deposits of $500.

At the end of the year each new account was valued at $336.36. He told me, “They would have been better off if I had bought them each a piggy bank and put five hundred-dollar bills in it.” He was right, at least for this year.

Each January, this man adds $500 to each grandchild’s 529 account. This year, he’s hesitating to send in the new deposits. He can’t help but wonder if it would be wiser, just this once, to put the money into CD’s at his local credit union instead. True, the return isn’t much-only three percent-but at least it would be a gain instead of a loss. He’s questioning whether it might be a good idea to get that three percent gain, and then put the money back into the 529 plans a year from now. By then, he hopes, the accounts will have started to recover. Continue Reading at FinancialAwakenings.com »

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