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Choosing Your 529 Plan Investments

And how Upromise can help your college savings grow

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Money that you put into your 529 plan account is invested in portfolios that are professionally managed and unique to each 529 plan.

Ways to Invest Your 529 Plan Money


One of the decisions you’ll need to make when you first set up your 529 plan account is to select how you’d like your contributions to be invested. A 529 plan lets you invest in a 529 investment portfolio — or several portfolios — that are managed by a professional investment management company. Each plan offers its own type of portfolios from which you can choose.


Here are Some Things to Keep in Mind:


These portfolios are investment portfolios that typically invest in a pool of mutual funds, ETFs, or other securities

It’s important to understand that when you invest in a 529 plan you are buying units of the portfolio that the plan offers—not shares of a mutual fund or a single stock or bond

Depending on the plan, you’ll have the ability to reallocate your 529 investment throughout the life of the account, but there may be yearly limitations

You can read about the available 529 investments on the plan’s website and in the enrollment kit you get when you first open your 529 plan account. You can also call the administrator at the plan’s toll-free number and get answers to your questions. It’s important to read the plan’s documents carefully so you can make a choice that’s right for your family’s needs.

Types of 529 Investment Portfolios


Some people like taking an active role in their investments, while others prefer a “set-it-and-forget-it” approach. A 529 plan generally offers choices for each type of investor. Two of the most popular types are age-based portfolios and risk-based portfolios.

Age-based portfolios are based on the year your student (the beneficiary) is expected to start college. If there’s a lot of time before college, the 529 investments can be a little more aggressive, so they can have more time to potentially grow.

As the student’s time to college gets closer, the portfolio is automatically adjusted to become more conservative, because you’ll be using the money for college sooner.


529 Age-Based Portfolio

Risk-based portfolios are designed to match the level of risk you’re comfortable with. Some people are comfortable with high-risk investments; others are more conservative.

Some 529 plan providers allow you to adjust your 529 investment allocations on your own, while others are adjusted professionally so that the level of risk and investment allocations stay the same.


Individual Portfolios in 529 Plan
 
 

Fuel Your 529 Investments with Upromise.

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Over the past 11 years, I’ve been using Upromise to help build my kids’ college savings. We’ve transferred $4,280 to the kids’ college fund. That’s been invested in a 529 plan. In case you can’t tell, I’m a big fan.

- Joe S., Upromise member

Before investing in any 529 plan, please consider whether your or the designated beneficiary's home state offers its taxpayers any benefits that are only available through that state's 529 plan. Investment objectives, risks, charges, expenses, and other important information are included in each 529 plan's offering statement; please read and consider it carefully before investing in a 529 plan.

When you invest in a 529 plan, you are purchasing municipal securities whose value may vary based on market conditions. Investment returns are not guaranteed, and you could lose money by investing in a 529 plan. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.