|Good News for 529 Plan Savers: More Investment Flexibility|
Call it a holiday gift. Thanks to legislation passed in
in 2015, owners of 529 accounts will be able to change the investment options
on their existing plan contributions twice per calendar year instead of just
once. This increased flexibility is a welcome option for parents and
grandparents who use 529 plans to save for their children's or grandchildren's
Previously, if an account owner had exhausted his or her
once-per-year investment change allowance, the only way to change investment
options again on existing contributions in the same year was to change the
beneficiary of the account, which may not have been desirable or feasible.
Many college savers--and even states that manage 529
plans--have characterized the once-per-year rule as too restrictive and have
called for changing it. Congress listened once before. During the stock market
downturn that began in 2008, Congress passed a rule allowing 529 account owners
to change their investment options on existing contributions twice per year,
but only for 2009. The once-per-year rule kicked back in for 2010.
Although a jump from one investment change to two isn't
earth-shattering (some would argue it's not nearly enough), it still offers a
bit more flexibility for 529 plan savers who want to make an additional
investment change during the same calendar year.
Investors should consider the investment objectives, risks,
charges, and expenses associated with 529 plans before investing. More
information about specific 529 plans is available in each issuer's official
statement, which should be read carefully before investing. Also, before
investing, consider whether your state offers a 529 plan that provides
residents with favorable state tax benefits. As with other investments, there
are generally fees and expenses associated with participation in a 529 savings
plan. There is also the risk that the investments may lose money or not perform
well enough to cover college costs as anticipated.
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
|Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.