Nearly 12 Million Sec. 529 Plans

Each year the College Savings Plans Network publishes a report on Sec. 529 plans. The National Association of State Treasurers created the network to monitor these plans.

All states maintain a tax-advantaged Sec. 529 plan. Cash amounts up to five annual exclusions may be contributed to an account in one year. The funds grow tax-free and may be distributed tax-free to students for appropriate educational expenses. The account beneficiary is usually a child or a grandchild of the donor.

In September 2014, the “Mid-year Review of 529 Plan Activity” was published. It is a good picture of the current use of Sec. 529 plans to fund future education needs for children and grandchildren.

1. Investment Balance – There currently is $244.5 billion in the Sec. 529 plans. During the first six months of 2014, the total balance grew 7.6% or by $17.4 billion.
2. Accounts – The number of accounts grew from 11.1 million at the start of 2014 to 11.83 million by mid-year.
3. Account Size – The average size of a 529 plan grew 14.7% over the past 12 months to $20,671.
4. Contributions – Parents and grandparents are very interested in these plans because 44% of the accounts received an additional contribution during the first half of 2014.

Information on Sec. 529 plans is available on www.irs.gov, www.savingforcollege.com or www.collegesavings.org.