How to Invest for College

As your kids get older, you may be wondering what you should invest your savings for their college education in -- stocks, for example, or bonds?

The longer the time period until you'll need the money, the more risk you can take. Here's a typical set of guidelines that some financial planners might offer you:

  • Birth to School Age: 100% growth stocks. You have more time, you can take more risk.

  • Age 6 to 13: You might want to think about making a few more "prudent" selections. 70% stocks, 30% bonds.

  • Age 14 to 18: You want things to continue to grow, but you also want to protect yourself from market volatility. Consider 30% bonds, 20% stocks, and 50% money market funds.

  • College Age: You want to be able to access the money easily and not have it drop in value. Consider putting the vast majority of it into a safe, interest-bearing account like a money market fund. For funds earmarked to be spent a year or two down the road, certificates of deposit are a good idea.

There's a lot to know about how to save for and pay for college. Drop by our College Savings Center. Also of interest might be these additional resources: the U.S. Department of Education, the Student Guide,, College Board, Peterson's, Campus Tours, The 529 plan guide, and Mapping Your Future.

Of course, you can also get a lot of guidance from your friends at the Fool, too. Drop by our College Savings Center and check out our book, The Motley Fool's Guide to Paying for School: How to Cover Education Costs from K to Ph.D., by Robert Brokamp.

If you wish you had a financial pro to talk to for your specific personal situation and to help ensure that you're saving enough to meet all your needs, then read more aboutTMF Money Advisor. It's a valuable service we're offering, featuring customized independent advice from a variety of objective financial pros.

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