In general, the types of investments you select should depend on your child's age. The more years you have until your child enters college, the more you can invest in growth-oriented investments like stocks. While stocks fluctuate in value, historically, they've helped investors' money grow faster than any other type of investment.*

Please note that the following investment allocations are offered as very general guidelines. The acutal percentages should reflect your specific situation and tolerance for risk.

Age 5 and Under	100% Stocks
For a newborn or very young child, for whom college is at least 13 years away, you can probably invest entirely in stocks.
Age 6 - 10	75% Stocks / 25% Bonds
With 8 to 12 years left until college, it may be wise to begin to add a conservative component to your investment. That means investing a larger portion of your college -bound money in income-producing bonds an less stocks.
Age 11 - 14	50% Stocks / 50% Bonds
With 4 to 7 years until college, a balance between stocks and bonds may be appropriate.
Age 15 and over	80% Bonds / 20% Money Market Securities**
At this point in time, with college relatively imminent, it's important to focus away from growth to preserving the value of your investment. As a result, your money should generally be invested in bonds and money market securities that typically offer lower investment risks than stocks.
* Source: Standard & Poor's 500. In return for their higher growth potential, stock prices are more volatile than those of bonds or Treasury Bills. ** An investment in money market funds si neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other governmetn agency. Although money market mutual funds seek to maintain a stable net asset value of $1 per share, there is no assurance that they will be able to do so.

Thinking About Putting it Off? Think Again. Delay Has Price Tag of Its Own.

The Smiths decided to start saving for their child's education the same year he was born, making an annual investment of $2,000 per year for 18 years in a Coverdell account toward an investment goal of $80,000. If they put off saving until their son was ten years old, they would have to invest more than three times as much per year - a total of $20,000 more over eight years - to make up for lost time. (Note: because the annual limit for Coverdell contributions is $2,000, they would have had to invest the rest of the annual contributions in an account that did not offer the Coverdell advantages of tax-free growth and tax-free withdrawals.) The cost of the delay does not include the money they would lose to taxes in the non-Coverdell account.

Systematic Investing Can Put Time on Your Side - No Matter What the Market Is Doing.

Systematic investing gives you the opportunity to take a "slow and steady" investment approach that can put time to work for you - and help a Coverdell Account grow through the magic of compounding. It's simple, you set up an account in a mutual fund and make automatic contributions on a regular schedule.*

Through systematic investing, a little money on a regular basis can go a long way. As this chart shows, as little as $100 a month can build to more than $50,000 over 20 years!

This hypothetical example assumes a 7% rate of return and the reinvestment of all dividends. The chart is for illustrative purposes only and does not represent the performance of any particular investment. The value of an acutal investment and the rates of return will vary. Systematic investing does not ensure a profit or protect against loss in declining markets. * Systematic investing does not assure a profit or protect against loss in declining markets.

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