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Decide what to hold in your 529 savings account

You've chosen an account and now you need investments to put in it.

What's "risk" and why do you need to think about it?

It's true in many parts of life: no guts, no glory; no pain, no gain. And when it comes to investing, it's hard to get much reward without taking some investment risk.

But how much? Depending on the investments you choose, your account could take on a little bit of risk or a lot. Ultimately, what matters most is what you're comfortable with.

You should also keep in mind the difference between investing for college and investing for K–12 tuition expenses. College goals have a longer time horizon, so you may be able to take on more risk.

How do you think about investing and risk?

If you think …

Fluctuations in the market are bad, no matter how long your investment time horizon.

You're more comfortable with investments that have a little more price stability, even if they may provide lower returns.

Your risk tolerance may be:

Conservative, which is a 1 or 2 on a scale of 1 to 5 measuring risk tolerance.


If you think …

You can deal with some market fluctuations.

Mixing different asset classes feels comfortable to you, because if one temporarily loses value, the other can help offset the decline in your account balance.

Your risk tolerance may be:

Moderate, which is a 3 on a scale of 1 to 5 measuring risk tolerance.


If you think …

Market fluctuations aren't a big deal.

You'd rather have the potential for higher returns, even at a higher risk of losing money.

Your risk tolerance may be:

Aggressive, which is a 4 or 5 on a scale of 1 to 5 measuring risk tolerance.


Use your "risk tolerance" to choose your investments

If you're saving for education and you've decided which risk tolerance feels the most comfortable for you, we recommend that you consider a Target Enrollment Portfolio that matches the year in which your beneficiary will enroll in school.

Not only will enrollment-year options save you some time now, they'll require less of your time on an ongoing basis because they're managed for you, based on when your child starts school.

Open a college account

We're here to help

Talk with one of our education savings specialists.

Call 866-734-4533

Monday through Friday
8 a.m. to 8 p.m., Eastern time


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Usually refers to investment risk, which is a measure of how likely it is that you could lose money in an investment. However, there are other types of risk when it comes to investing.

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An asset (like a stock or bond) purchased in the hope that it will increase in price or pay income.

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The profit you get from investing money. Over time, this profit is based mainly on the amount of risk associated with the investment. So, for example, less-risky investments like certificates of deposit (CDs) or savings accounts generally earn a low rate of return, and higher-risk investments like stocks generally earn a higher rate of return.

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Asset class

A major type of asset—stocks, bonds, and short-term or "cash" investments.

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Tax law update

On December 22, 2017, the president signed new tax legislation into law. The following describes several new provisions related specifically to 529 plan accounts, beginning with the 2018 tax year:

  • Account owners can use assets to pay for qualified K-12 expenses up to $10,000 per year per student.
  • Account owners can treat K-12 withdrawals as qualified expenses with respect to the federal tax benefit. The tax treatment of such withdrawals at the state level (determined by the taxpayer’s state of residence) is less clear, and states may ultimately determine the treatment of these withdrawals independently. Account owners should consult their tax advisors for further guidance.
  • Account owners can roll over 529 plans to ABLE plans, up to the ABLE annual contribution limit. States may need to expand the definition of qualified withdrawals to include rollovers into ABLE plans. Without a change to the definition, such rollovers could be categorized as nonqualified withdrawals.

We'll provide more information as additional details about the effects of the tax bill become clear. We encourage you to consult a qualified tax advisor about your personal situation.