Where to invest money for a child when college plans are uncertain
Traditional education savings accounts lock funds into specific uses, while standard custodial accounts hand over full control at adulthood before young adults are ready. This leaves parents trying to grow a lump sum for alternative paths like housing, business startups, or future security without risking total misuse or heavy penalties.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1Leaving money in a high-yield savings account (HYSA)2 people mentionedDid this help you?
- 2Using a 529 plan for education2 people mentionedDid this help you?
- 3Leaving money in a 529 planDid this help you?
- 4Opening a custodial brokerage accountDid this help you?
- 5Opening a brokerage account in the parent's name with the child as a beneficiaryDid this help you?
- 6Running financial projections using AI tools to model monthly contributions and future balancesDid this help you?
- 7Opening a UTMA accountDid this help you?
- 8Putting funds in a CD if needed within a short timeframeDid this help you?
- 9Exploring UTMA accountsDid this help you?
- 10Opening an individual brokerage account and investing in the S&P 500 or target date fundsDid this help you?
- 11Opening a standard brokerage account and investing in low-cost index fundsDid this help you?
- 12Using a UTMA account to benefit from tax-free earnings up to a certain threshold and greater flexibilityDid this help you?
- 13Contributing to personal brokerage accounts instead of separate accounts for children to maximize compoundingDid this help you?
- 14Opening a 529 account with yourself or a spouse as the beneficiary and changing it laterDid this help you?
- 15Putting money into a Certificate of Deposit (CD) or High-Yield Savings Account (HYSA) until the child is bornDid this help you?
- 16Holding funds in a regular brokerage account to maintain flexibilityDid this help you?
- 17Using the money to pay down existing debt or contribute to personal retirement accounts insteadDid this help you?
- 18Transitioning contributions to a standard taxable brokerage account in the parent's name with the child as a beneficiaryDid this help you?
- 19Maxing out personal and spouse retirement accounts (such as Roth IRAs) and withdrawing contributions before age 59 if neededDid this help you?
- 20Opening an UTMA account to hold investments for generic purposes beyond educationDid this help you?
- 21Buying direct baby supplies and daily essentials instead of giving cashDid this help you?
- 22Investing through personal accounts (RRSP, TFSA, non-registered accounts) and naming the child as the primary beneficiary in a willDid this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“I want to stop contributing to the 529, but where should I put the money?”source ↗
“My son is globally delayed, and while college as of now is still plausible, he may very realistically not go.”source ↗
“I just dont know if it's worth putting more into the 529 at this point.”source ↗
“Do I just buy some VT in my account and call it a day? And eventually gift him the funds when needed?”source ↗
“So I want to set my niece up to be financially secure.”source ↗
“I asked my sister to let me setup an RESP for but her and her partner chose to do things their way.”source ↗
“Anyone been in this situation and can share some guidance? Grateful for any information, I just want to get this done sooner for her.”source ↗
“That’s the part that scared me about investing it :/ especially with the way things are going.”source ↗
“I just don't know if either the Trump account or the 529 really makes sense for us.”source ↗
“So basically we need to set up a fund for our kids that will enable them to use the money for whatever they need, whether it be a down payment on a house, a start for a small business, school expenses, or maybe even just retirement.”source ↗
“All of the tax-advantaged accounts wouldn't allow them this kind of freedom, so now I am thinking of just opening a brokerage account for them and investing in low cost index funds.”source ↗
“Is there any particular reason to wait until the kid is born to open the 529 instead of just changing the beneficiary later on?”source ↗
“The huge reason is to keep flexibility for that money. Let's be real, the child might never be born, what do you do with a 529 then?”source ↗
“We would like her to have the option to return to school after some maturity and want to set that $60k aside for her. But knowing she may never go back I don’t think adding it to her 529 is the right move.”source ↗
“Investing in her future could mean something else like a down payment on a house or used to start a business or a retirement fund. I don’t really want to put it in a custodial brokerage that she can do anything she’d like with at 21, this should be to help her live a comfortable life.”source ↗
“Any suggestions on what we should do with this $60k? We are looking to retire in the next 1-3 years so want this set aside and growing.”source ↗
“Found out my wife is pregnant and I want to give the child the tools that I never had.”source ↗
“Want to be able to set the child up for success.”source ↗
“If my math is wrong please correct me.”source ↗
“I have 10k for my son sitting in a HYSA. He is 16. I would like to invest this for him instead of leaving it in the HYSA.”source ↗
“I have a child and I'm looking to long-term save for expenses that I would like to help them with 20 or more years from now.”source ↗
“Should I just open an individual brokerage in my name and earmark it in my head for this?”source ↗
“If i do that, should I be selling and rebuying annually to avoid a big tax bomb in 20 years?”source ↗
“I was looking at a 529 but since the child is not born yet, we would need to establish it in our name and then change the beneficiary later.”source ↗
“Would this be the most prudent way to invest it correctly, or would it be better to invest it in savings bonds and invest that in their 529 when they mature?”source ↗
Where this came up
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