Increase your contributions, not your risk

For 529 savers, investment outcomes depend largely on decisions about risk tolerance and contribution amounts. Some savers who are looking to improve their outcomes, might consider taking on more risk. But a recent Vanguard study found that you may be better off increasing your contributions instead.*

How much risk are you comfortable with?

If you're invested in one of your plan's age-based options, you've already decided how comfortable you are with taking on risk and chosen the track that's appropriate for you.

If you aren't sure where you fall on the risk/reward continuum, you may want to learn more about risk tolerance and how it relates to the type of investor you are.

See how comfortable you are with risk

More risk or more contributions?

Vanguard considers the important role contribution levels play when constructing its age-based options. For the study, simulations representing various financial scenarios were run for each of Vanguard’s 3 age-based options (Conservative, Moderate, and Aggressive).**

Some simulations calculated the probability of college savers accumulating enough money over 18 years to meet average 4-year college costs.*** The results showed that the benefits of saving more outweigh those of moving to a riskier allocation, as seen in the chart below.


Contribution amount****

Age-based option (risk level)

Probability of accumulating enough for 4 years of college

Increased risk level






Increased contribution amount





For a saver who contributes $1,000 a year, switching to the Aggressive option only increases the chance of accumulating enough money to 2%. But, if the contribution is increased to $4,000 the probability of success increases to 92%, no matter which age-based option is chosen.

As these scenarios indicate, you can achieve a better outcome if you increase your contribution amount rather than your risk level.

Reaching your college savings goals

If you're unsure about what your future college costs will be, you may want to use our college planning tools to estimate them. You can calculate the projected cost of college and also make a savings plan for covering that cost.

See projected college costs

Create a savings plan

Once you've reviewed the projected costs and figured out where you are in terms of your savings plan, you may find that the probability of reaching your college savings goals isn't that high. In that case, you may want to increase your contribution amount rather than your risk exposure.

Even if you're not able to contribute at the levels represented in these scenarios, know that every bit you're able to save may get you closer to paying more of those college bills. 

*Source: Vanguard Research, “When age meets risk tolerance: Best practices for 529 investing,” 2016.

**Simulations used the glide path for The Vanguard 529 Plan.

***Based on average tuition, plus room and board, totaling $78,192 for 4 years at a public, in-state institution. Source: The College Board, “Trends in College Pricing,” 2015-2016.

****All contribution amounts adjusted annually for inflation.

All investing is subject to risk, including the possible loss of the money you invest.