Age-based options: Simplify the way you invest
You know a 529 plan is great for saving for college.
But what investments will help you strike the right balance between growing your college savings, and trying to protect it from market losses?
If you're curious about how 529 age-based portfolios work, this video is for you.
With age-based investment options, you start by picking an option based on how risky you'd like to be with your money—conservative, aggressive, or somewhere in between. Then the account gradually moves from more stocks to more bonds as your child gets closer and closer to college.
Once you've decided on whether you're aggressive, conservative, or somewhere in between, your 529 plan will invest your money based on your child's current age.
So how do these portfolios work once you've opened your account? Let's take a look using the moderate age-based option.
You have a child who's 3. So your 529 investment starts here—having more stocks than bonds.
Then, when your child turns 6, you move to a portfolio with a little more in bonds.
Your allocation gets even more conservative at 11, and again at 16.
By the time your child's in college, your portfolio is all cash and bonds, decreasing the risk of losing your college money.
What's the benefit to all this moving around?
Well, when your child is young, you have more time to make up any potential market losses caused by riskier stock investments.
Your main focus is earning returns on your investments so you have enough money to cover those college costs.
But as your child gets closer to college, you shift into preservation mode—your main goal is to reduce the possibility of a loss in your account.
And the rebalancing happens automatically, giving you one less thing to worry about. It's that simple!
So there you have it. Age-based investment options:
- Complete portfolio in one investment.
- As conservative or aggressive as you want it to be.
- Automatically moves to more conservative investments as your child gets older.
Consider choosing one to help you reach your college savings goals.
Investment returns are not guaranteed, and you could lose money by investing in the Direct Plan.
If you have questions about contributions made by payroll deduction through your employer, call 877-NYSAVES (877-697-2837). Please read the Disclosure Booklet and Tuition Savings Agreement P D F document opens in a new window before making an investment or sending money.
This website contains links to other websites as a convenience to users. However none of the Program; The New York State Office of the State Comptroller; the New York State Higher Education Services Corporation; The Vanguard Group, Inc.; Ascensus Broker Dealer Services, Inc.; nor any of their affiliates endorses or takes any responsibility for any such website or for any information contained thereon, except, in each case, with respect to their own websites.
Before you invest, consider whether your or the beneficiary's home state offers any state tax or other benefits that are only available for investments in that state's 529 plan.
The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the Program Administrators and are responsible for implementing and administering the Direct Plan.
Ascensus Broker Dealer Services, Inc., serves as Program Manager and, in connection with its affiliates, provides recordkeeping and administrative support services and is responsible for day-to-day operations of the Direct Plan. The Vanguard Group, Inc., serves as the Investment Manager. Vanguard Marketing Corporation markets, distributes, and underwrites the Direct Plan.
No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, Inc., Ascensus Broker Dealer Services, Inc., nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio.© 2016 State of New York.