529 College Savings Plans: State-by-State Tax Benefit Comparison 2015

Updated for 2015. When choosing a 529 college savings plan, you’ll often have to weigh any in-state benefits with the superior investment options from an out-of-state plan. Every state seems to have their own unique combination of tax deductions and/or matching grants. Morningstar has a new PDF whitepaper called How to Choose a 529 Investment by Janet Yang, CFA. Inside, it goes into detail regarding state-specific tax benefits and provides a rough guideline as to whether you should stick with your in-state 529 plan. Here’s a handy map that break things down visually, state-by-state:


  • If your potential in-state tax benefit is greater than 5% of your contribution, then you should stick with your in-state plan. For example, if you contribution $100 a month ($1,200 annually), the tax benefit should be at least $60 to offset the chance that another state has a plan with slightly lower annual costs.
  • If your potential in-state tax benefit is less than 5% of your contribution, then it is a close call. You should weigh various factors like relative fee amounts and quality of investment options.
  • If your state does “tax parity” – meaning it offers the same tax benefits for any 529 plan – then you should (obviously) just choose the best nationwide plan.

There is also a detailed chart provided that quantifies tax benefits for a hypothetical family saving for college (two adults, two children, $100 per month savings per child) at both the $60,000 and $200,000 household income levels. Here’s just the top 10 states ranked by biggest tax break, updated for 2015. Download the PDF for the full list.


For reference, here’s an older chart from 2014:


Keep in mind that many of the factors considered here are subject to change. State-specific tax breaks may come and go. 529 plan costs and investment options also change from year to year, with the overall trend being that the worst plans tend to get better due to competitive pressure. (No state wants to be the “worst” plan, and an expensive plan can switch administrators and transform into a cheap plan within a year.) Meanwhile, the top plans tend to stay that way.

Therefore, I would perhaps lean towards grabbing any significant tax break that is available now and hope that the plan gets better in the future. Some states even let you grab the tax deduction and then immediately roll over the assets to any outside plan; other states “recapture” the tax deduction if do you that. Sometimes you can wait out the recapture period and then roll funds over to a better state 529 plan.

Morningstar Top 529 College Savings Plan Rankings 2015


Investment research firm Morningstar has released their annual 529 College Savings Plans Research Paper and Industry Survey. While the full survey appears restricted to paid premium members, they did release their top-rated plans for 2015. Remember to first consider your state-specific tax benefits that may outweigh other factors. If you don’t have anything compelling available, you can open a 529 plan from any state.

Here are the Gold-rated plans for 2015 (no particular order). Morningstar uses a Gold, Silver, or Bronze rating scale for the top plans and Neutral or Negative for the rest.

Here are the consistently top-rated plans from 2010-2015. This means they were rated either Gold or Silver (or equivalent) for every year the rankings were done from 2010 through 2015.

  • T. Rowe Price College Savings Plan, Alaska
  • Maryland College Investment Plan
  • Vanguard 529 College Savings Plan, Nevada
  • CollegeAdvantage 529 Savings Plan, Ohio
  • CollegeAmerica Plan, Virginia (Advisor-sold)

The trend here is consistency. There was no change in either of the lists above as compared to last year. Utah only missed on out the consistent list because they weren’t top-ranked in 2010.

The “Five P” criteria.

  • People. Who’s behind the plans? Who are the investment consultants picking the underlying investments? Who are the mutual fund managers?
  • Process. Are the asset-allocation glide paths and funds chosen for the age-based options based on solid research? Whether active or passive, how is it implemented?
  • Parent. How is the quality of the program manager (often an asset-management company or board of trustees which has a main role in the investment choices and pricing)? Also refers to state officials and their policies.
  • Performance. Has the plan delivered strong risk-adjusted performance, both during the recent volatility and in the long-term? Is it judged likely to continue?
  • Price. Includes factors like asset-weighted expense ratios and in-state tax benefits.

A broad recommendation is to simply stick with one of the plans listed above unless your in-state plan is offering significant tax breaks. Many other state plans may have specific investments that will work just fine as well. Here are my personal favorites, and why:

  • The Nevada 529 Plan for its low costs, variety of Vanguard investment options, and long-term commitment to consistently lowering costs as their assets grow. The Vanguard co-branding is also a sign of positive stewardship.
  • The Utah 529 plan has low costs, includes a nice selection of Vanguard and DFA funds, and is highly customizable for DIY investors. Over the last few years, the Utah plan has also shown a history of passing on future cost savings to clients.

I feel that a trend of consumer-first practices is important as the quality of all 529 plans can change with time. Sure, you can roll over your funds elsewhere, but wouldn’t you rather have your current plan just keep getting better and better?

Andre Agassi Interview: Typical Day in Retirement

agassi_logoAndre Agassi became famous for being a professional tennis player, but his greatest legacy may be through his work in charitable and social causes. He now oversees both a charitable foundation and the Andre Agassi College Preparatory Academy, a tuition-free charter school for at-risk K-12 children. As both a tennis and education enthusiast, I’m a big fan. As part of their “Life’s Work” series, Harvard Business Review interviewed Agassi.

I especially liked this quote about his typical day in “retirement”, as my ideal schedule is starting to look the same. Maybe not work every morning, but at least some mornings. Hiking, sports, or some other outdoor activity otherwise.

At the C2 Montreal conference earlier this year, you said a typical day for you now involves working in the morning but finishing by 2:30 in the afternoon to pick up your kids in the carpool line.

I have the luxury of tweaking the balance now, of never missing a baseball game or a dance competition. If I’m feeling like I need a business outlet, I plan work. But yes, I engage much harder with my kids because they grow up fast. By the time you’re qualified for the job, you’re unemployed.

The whole point of financial freedom is to do whatever you want, whether that means zero work, only charitable work, part-time work, or even more. Consider this quote from the man who has spent thousands of hours editing Wikipedia (over a million times)… for free.

Everyone should do work that is not for money. I believe that when you have free time, you shouldn’t spend it idling. I’m able bodied; globally speaking (though not at all locally speaking), I’m rich. I have a lot of resources other people don’t have — an internet connection, free time, the ability to speak English — and it’s incumbent upon me to use them to make the world a better place.

But back to Agassi – here he is on taking ownership of your career. I would expand this to perhaps your savings and investments?

What do you regard as your biggest career mistake?

I wish I had taken ownership of the business side of my career years ago instead of trusting certain people. Nobody cares more, or represents you better, than you do yourself.

Finally, he explains his intensive approach to changing the lives of children.

What sets your school apart?

One difference is time on task. There are no shortcuts. We have longer school days—eight hours versus six. If you add that up, it’s 16 years of education versus 12 for district peers. There’s also an emphasis on accountability, which starts with the kids themselves. They know this is a privilege: There are 1,000 kids on the waiting list. So they take ownership. The teachers have annual contracts; there’s no business in the world that could succeed if employees who worked for three years got a job for life. The parents are accountable too. They need to acknowledge, accept, and embrace the objectives set for their children. They come in, they volunteer time, they sign off on homework assignments. You have to cover all the bases.

Raise.me: Build Your Own College Scholarship with Small Achievements

raise_logoHere’s some news for anyone who’s in high school and applying to college. By way of this CNN Money article, a new startup called Raise.me lets you automatically earn small “micro-scholarships” from many different participating colleges simultaneously based on your individual achievements like:

  • Taking specific courses and getting good grades.
  • Participating in sports or other extracurricular activities like Yearbook club.
  • Community Service
  • Good standardized test scores on SAT, ACT, or AP exams.
  • Other honors like National Honor Society, Eagle Scout or Golden Eagle award, or National Merit Scholar.
  • Attending an event at a participating college.


For example, if you get an A in your English class this year, you can receive scholarships from dozens of colleges on raise.me all at once, including $1,000 from Tulane University, $500 from the University of Central Florida, and more. […]

When a college awards you scholarship money on raise.me, they are guaranteeing that they will include that scholarship money in your financial aid package if you apply for admission and are admitted. […] Each college on Raise.me has their own minimum GPA requirement.

Any US high school student in 9th through 12th grade is eligible, and you can enter your achievements retroactively. The money for the program is paid by charitable foundations including the Bill & Melinda Gates Foundation, colleges, and other funders like Facebook.

So far there are 76 participating colleges including Penn State, Loyola Marymount, Lewis & Clark, Michigan State, Temple, and University of Central Florida.

More thoughts:

  • This is ideal for smaller, lesser-known colleges to link up with good students that would never have considered them otherwise. The Harvards and Stanfords of the world don’t need this service.
  • By linking up small, achievable goals with measurable rewards, you can motivate high school students to work harder. I applied for a few college scholarships back in the day, but I hated that it felt like you were writing a long essay in exchange for a lottery ticket. This approach, if scaled successfully, might allow merit-based aid to be distributed more evenly.
  • Doesn’t is seem like the “gamification” of college scholarships? Like power-ups in video games, students can increase their scholarship “scores” gradually. You don’t want to make the entire high school experience a checklist, but hopefully it will be a net positive.
  • I’d worry that this approach could be gamed by the colleges as well due to their “sticker price” model where they post some astronomical tuition that nobody really pays. In reality, they alter what they charge you based on your desirability to them. I’ve written about this phenomenon here, here, and here. In other words, most admitted applicants already get $20,000 or more in “grants” anyway.

If you have a child in high school, I don’t see why you wouldn’t encourage them to at least check this website out.

Tennessee Offers Free 2-Year College Tuition for All High School Graduates

collegeUpdate 2015. The Tennessee Promise program has welcomed 15,000 students in their first year of offering free community college tuition. The number of students attending community college full-time straight from high school grew 14%. This Boston.com article includes an interesting quote:

“The reason Tennessee can afford Tennessee Promise is that 56 percent of our state’s community college students already have a federal Pell grant, which averages $3,300, to help pay for the average $3,800-per-year tuition,” said Tennessee State Sen. Lamar Alexander in a statement. “The state pays the difference–$500 on average. Nationally, in 16 states, the average Pell grant pays for the typical student’s entire community college tuition.”

Oregon has also recently passed their own free community college bill.

Original post from April 2014:

Tennessee lawmakers recently approved a program that would cover tuition and fees at two-year colleges for any high school graduate. The “Tennessee Promise plan” is the first of its kind in the U.S., although reportedly Florida, Mississippi, and Oregon are considering similar plans. It will be interesting to see if it succeeds in making higher education more affordable.

Participants will have to maintain a 2.0 grade point average, attend mandatory meetings, work with a mentor, and perform community service. The program is also “last money in” after other scholarships and grants. I hope that they will also make sure that any credits earned will transfer over to 4-year universities and that the courses are rigorous enough that the students don’t arrive at a significant disadvantage. If successful, this could essentially halve the cost of a in-state Bachelor’s degree, as most students will be able to live at home for the first 2 years as well.

I went to a well-respected public university, and while there got to know several community college transfer students as both an undergrad and graduate student instructor. As a whole, I found them to be much more hard-working and excited about their studies. I don’t have hard numbers but I’d be willing to bet that the junior transfers actually got better grades than those of us who entered as freshman. (Obviously those who got accepted as transfers were a selected group, not representative of all community college students. They also tend to be older, which can help with maturity.)

Free community college may also reduce the significant number of people who enroll at a 4-year university, rack up student loan debt, and don’t finish. According to this Slate article, 20% of those who enroll full-time at a 4-year program don’t finish within 6 years. Community colleges can also have low completion rates, but it is especially awful to have no degree and a big pile of debt.

Also related: We know student loan debt is growing, but now delinquency rates are increasing as well.

Completed Sample IRS Form 709 Gift Tax Return for 529 College Savings Plan

529Let’s say you are fortunate enough to be able to make a large contribution to a 529 college savings plan, perhaps for your children or grandchildren. You read from multiple sources that you are able to contribute up to $70,000 at once for a single person or up to $140,000 as a married couple, all without triggering any gift taxes or affecting your lifetime gift tax exemptions (for 2014 and 2015). What you are doing is “super funding” or front-loading with 5 years of contributions, with no further contributions the next four years.

Those are pretty big numbers, but you also discover that any contribution above $14,000 will require you to file a gift tax return because that is the annual gift tax exclusion limit for 2014 and 2015. You’ll need to fill out IRS Form 709 [pdf], “United States Gift (and Generation-Skipping Transfer) Tax Return”. The instructions are quite long and confusing. You ask your accountant and they suggest talking to your estate lawyer. You may wish to avoid paying the $400 an hour or whatever it will cost as you know the form should be pretty straightforward.

So how do you fill out form 709 for a large but simple 529 contribution? You search for sample completed forms online but very few clear resources turn up. Here are the resources that I found most helpful:

Here’s a redacted version of my completed Form 709. Let me be clear that I am not a tax professional or tax expert. I am some random dude on the internet that did his own research to the best of his abilities and filled out the form accordingly. This is what my form looks like. It could be wrong. You’ll need to make changes to conform to your specific situation. Feel free to offer a correction, but please support your statement.

For my version, I am assuming that you and your spouse contributed the maximum $140,000 together in 2014. (No, I didn’t actually put in that much.) Note that you’ll need to file two separate gift tax returns, one for you and one for your spouse. Mail them to the IRS in the same envelope, and I like to send them certified mail.




Here is my Form 709, Schedule A, Line B Attachment

Form 709, Schedule A, Line B Attachment

– Donor made a gift to a Qualified State Tuition Program (a 529 plan).

– Total amount contributed $140,000 in 2014.

– Donor elects pursuant to Section 529(c)(2)(b) of the IRS Code of 1982, as amended to treat the gift as having been made equally over a 5-year period.

– The gift was made jointly by the taxpayer and the taxpayer’s spouse on January 1st, 2014 and will be split equally in half.

– Election made for $140,000 over 5 years is equal to $28,000 total per year, or $14,000 per person per year.

– The contribution is for

Juniper Doe
1234 Main St
New York, NY 10001

When to file Form 709. When taking the 5-year election, you must fill out the gift tax return (Form 709) by April 15th of the year following the year in which in the contribution was made. So if you make the contribution in 2015, you must file Form 709 by April 15th, 2016. If you make the upfront contribution in the first year and then make no future contribution in the next four years, you do not have to file a gift tax return after the one you did for the first year.

What if you’re late? Well, you should file the Form 709 as soon as possible. If you did not exceed the limits then technically there is no gift tax due, and there is no penalty that I could find for late filing when there is no taxes due. Still, I would file ASAP.

The tax information set forth in this article is general in nature and does not constitute tax advice. The information cannot be used for the purposes of avoiding penalties and taxes. Consult with your tax advisor regarding how aspects of a 529 plan relate to your own specific circumstances.

Annual Income by College Major Ranked by Quartile and Percentile

Here’s another article about the relationship between college majors and future earnings. But this WSJ article at least looks beyond just providing the median wage and helps you visualize the spread between the 25th and 75th percentiles for each major:


There is also an interactive chart embedded in the WSJ article. For example, I could sort to find the top 10 majors according to their 25th percentile wage, imagining more of a worst-case scenario that just assuming I’ll get the median income or higher. Here are a few more nuggets that may surprise you:

Graduates of architecture programs may have higher salaries than teachers, as the latest paper shows, but the February report noted that they’re also likely to see unemployment rates twice those of education majors.

[…] just choosing a major in science, technology, engineering or mathematics, known as the STEM fields, doesn’t secure a hefty paycheck. Mr. Carnevale’s team found that biology majors have median annual wages of $56,000 over their careers from age 25 to 59, or about one-third less than physicists.

Yet once biologists finish graduate programs—and more than half of them do—their median annual earnings jump to $96,000, roughly on par with physicists who have advanced degrees.

There are also wide ranges in salaries for specific majors. The top 25% of earners who majored in finance can expect annual earnings of more than $100,000, while the bottom quartile may bring in just about $50,000 a year.

[…] lifetime earnings for economics majors at the 90th percentile are nearly triple those at the 10th, reflecting the range of destinations for such experts in government and the private sector.

I support the notion that prospective income shouldn’t be the only consideration in choosing a career, as I’ve tried working in decent-paying fields that don’t interest me and it just didn’t work out. However, money remains a factor and I like to have an idea of what the stats are.

Here’s another thing to consider: early retirement in under 20 years requires a 50% savings rate. Such a savings ratio is much more likely if you make twice the overall median salary with median spending (make $120k household income, spend $60k) as opposed to a median salary and half-of-median spending (make $60k household, spend $30k). Someone could start working at 21, retire by 40, and spend the rest of their life doing whatever job or activity they wanted to. Semi-retirement is another option.

ROI of Brand Name Colleges? It’s What You Study In College That Matters, Not Where You Go

Soon high school seniors will start receiving their college acceptance letters. This week’s issue of The Economist has an article discussing the results of a PayScale study of the relationship between the financial return on investment (ROI) of a college degree with the selectivity of the college itself. Via NextDraft.


The two trendlines above support the conclusion that what you study matters far more than where you study it. The flatness of the lines show that selectively doesn’t improve ROI much for degrees of the same major, while the gap between them shows that the type of major has a significant effect on average future salary.

Engineers and computer scientists do best, earning an impressive 20-year annualised return of 12% on their college fees (the S&P 500 yielded just 7.8%). Engineering graduates from run-of-the-mill colleges do only slightly worse than those from highly selective ones. Business and economics degrees also pay well, delivering a solid 8.7% average return. Courses in the arts or the humanities offer vast spiritual rewards, of course, but less impressive material ones. Some yield negative returns. An arts degree from the Maryland Institute College of Art had a hefty 20-year net negative return of $92,000, for example.

You can also play around with the PayScale ROI rankings here.

Take from this data what you will, but perhaps it will soothe the pain of rejections and help relieve the societal pressure to get a “brand name” degree.

Best 529 with FDIC-Insured High Yield Savings: Interest Rates Up to 2.25% APY

529Many people want to take advantage of the tax benefits of 529 college savings accounts, but don’t want to deal with the volatility of stocks or bonds. Perhaps the beneficiary will need the funds soon, or you want the security of FDIC insurance. Many students are now adults saving for their own educations in a few years. In this case, consider the Virginia CollegeWealth 529 Savings Account and its following features:

  • FDIC-insured through partner banks
  • $25 minimum to open
  • No annual fee
  • No monthly maintenance fees
  • No state residency requirements
  • Up to a $4,000 state tax deduction for Virginia taxpayers
  • High interest rates of up to 2.25% APY

Deposit details. The FDIC insurance coverage is $250,000 per account owner, per bank. All Virginia College Savings Plan 529 Accounts have a maximum aggregate contribution limit per beneficiary of $350,000.

Will the interest rate stay high? It is important to note that this is a savings account and not a certificate of deposit (CD), so the interest rate is subject to change at any time. If you are willing to commit to a 5-year CD, the Ohio CollegeAdvantage 529 has 5- to 12-year CDs paying 2% APY right now.

However, looking through old documents indicates that the interest rates that you see today for BB&T Bank have been the same at least as far back as June 30, 2011 (source, also checked in 2012 and 2013). That means BB&T’s rates have been the same for nearly four years during a period of historically low interest rates. I think that should provide some measure of confidence that the rates won’t drop dramatically the day after you open the account.

For Union Bank, rates have been slightly higher in the past (2.5% APY in 2011, 2.3% APY in 2012). Not a huge drop over time but interesting that Union Bank used to be higher but now BB&T is higher. I’m assuming you can also switch internally between these two banks. You can also roll over your assets into another 529 plan in the future, if you wish.

Partner banks and current rates (as of March 4th, 2015)

Union Bank & Trust

  • Balances of $1 to $9,999: 1.75% APY
  • Balances of $10,000 or more: 2% APY


  • Balances of $1 to $9,999: 2% APY
  • Balances of $10,000 to $24,999: 2% APY
  • Balances of $25,000 or more: 2.25% APY

Best high-yield savings account, period? In a weird twist, you can put money in a 529 and take an unqualified withdrawal where you’ll be subject to income taxes and an additional 10% penalty on any earnings . But you’d have to pay income tax on interest from a normal savings account anyway. That means you could treat this account like a regular taxable savings account and get an effective rate of 1.8%+ APY even after any penalties. That is nearly a full percentage point higher than my current Ally Bank high-yield savings. I don’t know how many people have actually taken advantage of this “loophole” option, but it is interesting. One possible drawback is that it can take longer (possible weeks) to withdraw money from a 529 than from a traditional bank account.

Comparing Your 529 In-State Tax Deduction vs. Better Out-of-State Plans

50statesI’m getting ready to put down a decent chunk of money into a 529 college savings plan, which means lots of research as there are a lot of options and nuances. A general plan for those without strong investment preferences would be to go with one of the age-based portfolios from a consistently top-rated plan by Morningstar, or your in-state plan if the tax deduction is juicy enough.

But how exactly do you compare them? The easiest way to calculate your in-state tax benefits is to use a tool from either Vanguard or SavingforCollege.com.

Let’s say you are a married Virginia resident making $100,000 in household taxable income and you want to contribution $4,000 a year to college. Here’s what the Vanguard tool says:


The big block of text explains the assumptions the tool had to make in order to keep things simple. Note that in addition to the state tax savings, you have to consider that you’ll have less state tax to deduct on your federal return (if you itemize deductions).

The SavingForCollege tool comes to the same conclusion regarding tax savings (minus a rounding difference). However, it also goes one step further and helps you quantify the relative value of your in-state tax deduction.


In order for the out-of-state 529 plan to make up the difference from the lost state tax benefit, it would have to achieve better net investment returns of 0.25% per year over the 18 year time period.

So if your in-state plan offers similar desired investments but with expense ratios that were 0.25% higher than the best out-of-state plan, you may actually want to forgo the tax deduction. Note that this number is also based on a set of default assumptions like an 18-year investment period and a 6% annual returns for both plans (you can edit these as you like).

But wait! Some state plans allow you to roll your assets over to another state after making the contribution, and keep the tax deduction. So you could make the contribution, grab the tax credit, and then roll it over into another state’s plan. (You are allowed to have multiple 529 plans.) However, many states have a recapture or “clawback” provision that will make you pay back the tax benefit somehow. For example, if you perform a rollover or non-qualified withdrawal from the Virginia 529 plan, the principal portion will be added back to your Virginia taxable income (to the extent of any prior deductions).

529 Plan Tax Benefits Are Subject To Future Change

529During the most recent State of the Union address, the President’s proposal includes removing one of the current key tax advantages for 529 college savings plans. It is important to remember that this is only a proposal and is unlikely to pass a Congress with a Republican-majority. But it does serve as a reminder that the features of all tax-advantaged accounts are subject to future change.

Section 529 plans currently offer excellent tax advantages for college savings. You put in after-tax money, and that money is allows to grow on a tax-deferred basis, and as long as future withdrawals are used for qualified education expenses, there are no taxes on the back-end either.

The proposed changes are to now tax withdrawals (capital gains only) as ordinary income, leaving only the ongoing tax-deferral aspect. In exchange, the annual limits of educational tax credits would be increased along with other changes.

A quick history lesson on 529 plans. Per Wikipedia, Section 529 plans have only been around since 1996, and started out with withdrawals taxed as ordinary income. Tax-free withdrawals for qualified educational expenses were only added in 2001 on a temporary basis (scheduled to expire in 2010) but then in 2006 they were made “permanent” (not scheduled to expire). That is why this is referred to as a “roll back”.

The concern now is that the tax advantages only benefit a small group of people (read: rich folks). From CNN Money:

An analysis by the Government Accountability Office found that in 2010 less than 3% of families saved in a 529 plan. The GAO estimated that families who saved in 529s had a “median financial asset value” that was 25 times that of families without a 529.

But the College Savings Foundation, citing an investment industry analysis, noted that in 2014, over 70% of 529 plans were owned by households with income below $150,000.

The lesson here is that not all tax benefits are considered “sacred”, especially if they can be spun as rich vs. poor. For example, in my opinion the ability to inherit IRAs (“Stretch IRAs”) in order to give your children decades more of tax-free growth probably won’t last forever. But the idea of taxing Roth IRA withdrawals would be very hard sell as it would broadly affect people across various income levels.

I don’t think I would have minded if this was for a newly-designed plan, but I dislike the idea of penalizing the many families (like myself) who have placed their money in a 529 due primarily to the promised tax benefit (which can’t be withdrawn early without penalties). (Edit: The proposal language actually only refers to “new” contributions, so existing contributions should be grandfathered. Might make for some confusing accounting.) Still, as the parent of two kids under 3, I have to decide whether to keep putting money into these things without knowing what the rules will be in the future.

More: WhiteHouse.gov, WSJ

529 College Savings Plans Now Allow Two Investment Changes Per Year

529Here’s a quick note about a change in 529 college savings plans. Up until recently, you were only allowed one investment change per year, per beneficiary. Starting in 2015, a change in federal law means that you are now allowed two investment changes per calendar year, per beneficiary.

Specifically, this is due to a provision of the new ABLE (Achieving a Better Life Experience) Act. For those that like history lessons, this Fairmark article has more background on why 529s restrict investment changes at all.

Now, the rules have always permitted a change in investment options any time you change the account’s beneficiary, so people have also used this as a workaround although it may not be wise to abuse it. Changing your asset allocation all the time usually isn’t a good idea either, but now you have a little more flexibility (i.e. you can undo a change you regret making!).