Starting early is the single biggest advantage in college saving. Time lets compounding do the heavy lifting, while a disciplined plan and the right accounts keep taxes and costs in check.

With a 529 already opened—and a custodial account in place—you’re positioned to use a handful of broad ETFs to grow efficiently and keep decisions simple.

Start Priorities

Before funding a child’s account, secure your own retirement contributions and emergency reserves. College can be financed with scholarships, grants, work-study, or loans; retirement cannot. If eligible, a Roth IRA can double as long-term retirement savings with the flexibility to withdraw contributions (not earnings) if life throws curveballs.

529s First

A 529 plan is generally the most tax-efficient way to save for education. Contributions grow tax-deferred and qualified withdrawals are tax-free. Many states sweeten the deal with deductions or credits. Target-enrollment portfolios inside 529s automate age-appropriate shifts from stocks to bonds, cutting your maintenance to near zero.

Custodial Accounts

After building a solid 529, a custodial account can fund non-qualified expenses or goals beyond tuition. Be mindful of the “kiddie tax” rules on unearned income and that, at the age of majority, the assets become the child’s to use. Keep investments broadly diversified and low cost to minimize taxes and tracking headaches.

ETF Basics

ETFs are transparent, tax-efficient, and typically inexpensive. Most brokerages now offer commission-free trading, so focusing on expense ratios and liquidity matters most. Favor total-market funds for core exposure and avoid narrow, speculative themes. You want consistency, not gimmicks, for a multi-year college runway.

Go Global

U.S. investors often overweight domestic stocks, but global markets are roughly split between U.S. and international. A global allocation can improve diversification and smooth country-specific risks. Over long cycles, leadership rotates; owning both developed and emerging markets reduces the need to guess the next winner.

Expert Perspective

Mark Kantrowitz, a financial aid expert, said that time is your greatest asset when saving and that each dollar set aside is one less you may need to finance later.

One-Fund Option

Prefer ultra-simple? A single, global stock ETF can work in a custodial account, complemented by the 529’s glidepath. A total-world fund bundles U.S. and international equities in market weights, delivering broad diversification and low fees in one ticker. Reinvest dividends automatically and add on a schedule to harness dollar-cost averaging.

Two-Fund Mix

Want more control and tax-loss-harvesting flexibility? Pair a U.S. total-market ETF with a total international ETF. Set a target (for example, 60% U.S. / 40% international) and rebalance once or twice a year—or when the mix drifts meaningfully—to keep risk aligned. This approach can marginally lower costs and give clearer levers for rebalancing.

Add Bonds Wisely

As college approaches, lower volatility matters more than squeezing out returns. Begin introducing high-quality bonds—total U.S. bond or short-term Treasuries—around middle school, increasing the fixed-income share each year. In a 529, a target-enrollment portfolio handles this automatically; in a custodial account, schedule annual allocation check-ins.

Taxes & Tactics

Place the most tax-efficient assets in the custodial account: broad index equity ETFs usually throw off fewer taxable distributions. If harvesting losses, mind the wash-sale rules across both accounts. In the 529, take advantage of automatic rebalancing and keep contributions steady; even modest monthly deposits compound meaningfully over 10–13 years.

Costs & Risks

Favor ETFs with rock-bottom expense ratios and deep liquidity. Costs are guaranteed; outperformance isn’t. Avoid chasing recent winners or sector fads—consistency beats complexity. Remember that equities can be bumpy; the plan’s glidepath, rebalancing, and your time horizon are your shock absorbers.

Sample Blueprint

In a custodial account for a five-year-old, consider a simple 90/10 split: 90% equities (either a total-world ETF, or 60% U.S. total-market / 40% total international) and 10% short-term bonds. Shift 5–10 percentage points from stocks to bonds every year beginning around age 12. Inside the 529, use the age-based track and automate contributions.

Conclusion

For college saving, the best portfolio is the one you can stick with: low-cost, broadly diversified, and easy to maintain. Lead with a 529 for tax advantages, use a custodial account for flexibility, and anchor both with total-market ETFs through a steady contribution routine.