529 Accounts Actually Getting Some Play In Families' College Plans

Tuesday, August 16, 2011 07:07
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529 Accounts Actually Getting Some Play In Families' College Plans

Tags: 529 | education planning

For years, 529 college saving plans have been a niche business compared to the much larger retirement plan industry. That may slowly be changing.

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According to the non-profit College Savings Foundation, a full 24% of parents say they have opened a special-purpose account to help pay the school bills for the kids.

 

That's nominally good news when you consider that this is still only a $150 billion marketplace, but there is definitely a lot of room for outreach.

 

Among those parents without 529 accounts, close to 70% have never heard of these vehicles. 

 

The rest don't like them because they don't want their money locked up in an education-only account if the kids don't end up going to school, while a few just don't get the tax benefits.

 

Perhaps ironically, the parents the CSF talked to were more focused on education than retirement. The survey was conducted before the recent market downswing, so it would be interesting to see whether 529 accounts are still a top priority for those whose nest eggs took a pounding.

 

 

 

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