You guys are great. I just wanted to say that first. Thank you for all the thoughtful replies.
Wife still has MAJOR objections to 529 plans, including, but not limited to, loss of principal (value could go down) and loss of control (good for qualified expenses only, paperwork hassles, etc.). And, in a way, I can't really blame her. I need to come up with some balanced approach. Diversify, right? Maybe I put 100K in the jumbo CD (that's the minimum needed for jumbo status, but you guys knew that, right?), then put .... maybe 25K ... into each kids' 529 account???????
On top of that, I could try to find a market-linked CD that I understand ( I've read and re-read the FDIC warnings, HueyLD. I've even gone over some Term Sheets I found laying around the web. Some make my head swim more than others). I could put ... thinking out loud here .... 50K into one of those. Truth be told, though ... paying taxes on phantom income is more than a little disconcerting. I would need to REALLY understand that part of the MLCD prior to signing on the dotted line.
100K Jumbo CD
75K 529 plans
50K left over to invest in ... ??? ... tax managed/tax exempt VG funds?????
Sometimes I think... "Man, if I lived under a bridge, I wouldn't have these problems."
livesoft: You're right, of course, on the not needing it all in 4 years. I was even tinkering with the idea of putting the eldest son's 529 in "safe" stuff, then getting much more aggressive with the youngest's portion. If needed, I can switch beneficiaries to maximize results. My wife might call that gambling, though.
tfb: on a 3.5% CD, you're right... if the index stays at 14%, the MLCD loses. The best jumbo out there now pays 1.85%. The MLCD you mentioned is beating that. For now.