Adolescence (10-18 Years)

As your child's investment horizon shortens, you need to make appropriate adjustments in your investment plan. With five to eight years left, your portfolio should still emphasize growth. But there will be an increasing emphasis on funds offering income and stability, providing lower exposure to risk. Bond and Money Market Funds will in turn give you a low-to-moderate risk profile.

In the last year before college, you may want to reallocate your portfolio depending on how you are invested. Rebalancing your child's portfolio with more conservative investments offers a high degree of stability.

Hidden Expenses in College
Don't forget about room, board, and books. These "hidden" costs will not necessarily be on the tuition bill, but do need to be factored in to your savings estimates. These hidden expenses will also escalate by the time your child reaches college age. Moving your portfolio towards income and stability in your child's later adolescence can help you earn a little extra money for those hidden expenses.

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