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My son is a junior in college. To pay for his last year or so, he must either cash in a portion of his Mutual Fund inheretance or get a non-need student load. The fund has outperformed S&P500 for the last 4 years but carries a 2.5% fee. With the market at current lows, would it be wise to just leave the mutual fund alone for a year or two and go for a low interest loan?
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To pay for his last year or so, he must either cash in a portion of his Mutual Fund inheretance or get a non-need student load. The fund has outperformed S&P500 for the last 4 years but carries a 2.5% fee. With the market at current lows, would it be wise to just leave the mutual fund alone for a year or two and go for a low interest loan?

What's the inheritance supposed to be for? Normally, I would recommendend taking out loans rather than liquidating assets, but
if the inheritance was given to him in order to pay for college, then spend it on what it was intended for. If there's some other need for the inheritance money, unsubsidized loans are ar pretty good deal. Interest rates are low and repayment terms are flexible.

I do wonder why he is paying a 2.5% fee on any mutual fund, regardless of performance. He may want to look into funds that cost him less. 2.5% off the top each year compounds to a lot of money. He may also want to think about moving some of his money into Roth IRAs or regular IRAs. It may save him some taxes and get some money set aside that it will be more difficult to touch for a while.

Hope this helps.
NellieD
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