529 College Savings Plans Now Allow Two Investment Changes Per Year

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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!).

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Comments

  1. This is good news. Thanks for the update.

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