By AnnaMaria Andriotis
Parents are once again souring on one of the most popular ways to put away money for their children’s college education – college-savings plans — according to just-released third-quarter data.
- Getty Images
The new figures, from the Financial Research Corporation, show that parents pulled an estimated $354 million from 529 college-savings plans in the third quarter. That’s a dramatic reversal from the previous quarter, when investors added $2.5 billion to these plans. It also marks the highest level of outflows since the third quarter of 2008, during the financial crisis.
The results come as many college-savings have been struggling through the recent bout of market volatility. Investments in 529 plans, which are state-sponsored tax-advantaged accounts for college savers, fell an average of 9.5% for the third quarter and were down about 6% for the year through Sept. 30, according to fund researcher Morningstar Inc. That wasn’t as large as the broader market’s drop — the Standard & Poor’s 500 stock-index fell 14% and 10% over the same periods — but investing experts say it was the most significant setback for these plans in recent years.
To be sure, contributions to 529 plans tend to decrease in the third quarter, since that’s when parents withdraw money to pay for college tuition, says Paul Curley, director of college-savings research at the Financial Research Corporation.
But the recent outflows stand in stark contrast to last year, when investors still added $927 million to 529 plans in the third quarter, down from $1.9 billion in the second quarter, according to FRC. “What I’m seeing is that people are reluctant to continue putting money into 529 plans,” says Lea Ann Knight, a fee-only certified financial planner in Bedford, Mass. who focuses on college savings strategies.
Indeed, financial advisers say ongoing market volatility has caused parents to rethink how they’re saving for college, with some eliminating or scaling back their contributions to 529 plans for other, less risky strategies. Some clients with children nearing college are turning to bank accounts and certificates of deposit, says Knight. These accounts provide protection from stock-market losses, she says, but little in the way of yield; and unlike 529 plans, earnings in these accounts are taxed.
Other parents are stashing money for their children’s education in Roth IRAs, says Deborah Fox, a San Diego-based financial planner and founder of Fox College Funding. With these accounts, parents get access to more investment options than those offered in a 529 plan, she says, and the earnings don’t need to be used for college. In contrast, earnings in 529 plans that are withdrawn but not used to pay for tuition and other college expenses get hit with income tax and a 10% federal tax penalty.
By WebOsPublisher
[#SAK-9158] Multiple Paste icons appearing on Nightly – Sakai
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SAK-9158
Multiple Paste icons appearing on Nightly
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Type:
Bug
Status:
Closed
Priority:
Major
Resolution:
Fixed
Affects Version/s:
2.4.0
Fix Version/s:
2.4.0
Component/s:
Content
Labels:
None
Environment:
Firefox,
2.6.x Status:
None
DescriptionLooking at Resources on Nighlty using Firefox, from time to time 2 paste icons appear rather than 1. I can’t recreate this reliably yet, but am documenting it FYI and will come back with details when I can.
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Jim Eng
added a comment – 02-Apr-2007 07:02
Not sure if this is the issue here, but one problem someone mentioned is that if you select some items for copy and some items for move, you get a paste icon for each, but there’s no way to tell which is which. Selecting one or more items for copy or move should clear any previous incomplete copy or move action.
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Jim Eng
added a comment – 02-Apr-2007 07:02 Not sure if this is the issue here, but one problem someone mentioned is that if you select some items for copy and some items for move, you get a paste icon for each, but there’s no way to tell which is which. Selecting one or more items for copy or move should clear any previous incomplete copy or move action.
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Jim Eng
added a comment – 02-Apr-2007 15:40
This should be included in QA tag 2.4.0.009
We save lists of resources being copied/moved in state. If the user selects copy and then selects move before completing the copy, the copy list was retained, leading to two paste icons. We now erase the first list of items to copy/move if a second set of items is selected.
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Jim Eng
added a comment – 02-Apr-2007 15:40 This should be included in QA tag 2.4.0.009
We save lists of resources being copied/moved in state. If the user selects copy and then selects move before completing the copy, the copy list was retained, leading to two paste icons. We now erase the first list of items to copy/move if a second set of items is selected.
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Megan May
added a comment – 04-Apr-2007 11:07
These items will be included in the .009 tag as per discussion at the release meeting.
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Megan May
added a comment – 04-Apr-2007 11:07 These items will be included in the .009 tag as per discussion at the release meeting.
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Andrew Poland
added a comment – 04-Apr-2007 12:31
merged to 2-4-x r28344
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Andrew Poland
added a comment – 04-Apr-2007 12:31 merged to 2-4-x r28344
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Harriet Truscott
added a comment – 05-Apr-2007 07:34
Verified fixed on QA1-NL
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Harriet Truscott
added a comment – 05-Apr-2007 07:34 Verified fixed on QA1-NL
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Assignee:
Unassigned
Reporter:
Harriet Truscott
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Dates
Created:
02-Apr-2007 03:04
Updated:
13-Jul-2009 11:43
Resolved:
02-Apr-2007 15:40
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I have 7 grandchildren each with a 529 plan. I find the restriction of only allowing one annual reset of investments within an account to be too confining.
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http://www。cheapedhardy2。tk/