A Quirky 529 College Savings Plan Rule

As we know 529 college savings plans are a great way to save for college.  What you might not know is that an IRS rule limits you to just one investment change per calendar year.  This has alot of parents in a panic as they look to increase their bond allocation given the state of the market.  Seems a bit restrictive to me, what does everyone think?

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2 Responses to “A Quirky 529 College Savings Plan Rule”

  1. Jeff Ryan Says:

    529s are inherently restrictive to start with considering that the whole investment universe is not available to you.

    I’ve always been a fan of staying the course anyway. Despite what CNBC says, buy and hold isn’t dead. It’s just hurting and the reporters need something to talk about. Even when getting close to window where you will begin to take withdrawls and through the actual withdrawls, I am still 100% equity. Most consider that way too aggressive, but there are very few 5 year periods where the market has been down, and we are in the middle of the only 10 year period. I like a few core funds and will take them with me to the grave. My asset allocation will always be 100% equity — but I’m weird.

  2. Nicole Says:

    Jeff-

    I am not advocating trading actively in and out of the 529 but I think the rules are a bit restrictive.

    Thanks for the comments!


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