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News Release

National 529 College Savings Plan Day: Four Strategies to Maximize College Savings

May 28, 2019

Understanding the 529 plan can unleash its value, says CFP Board Ambassador David Zuckerman, CFP®

Paying for college continues to be a challenge for many Americans, but on this 529 Day it’s time to explore how one option can provide a great value for students and their families.   

The 529 savings plans sponsored by states across the country are great savings tools for families who want to cover the education expenses of their children. Like most investment accounts, it is wise to open one early and contribute regularly. Unlike a traditional savings account, 529 savings plans allow for multiple investment options like mutual funds, which may generate better returns. A 529 savings plan is one of the only savings vehicles where investment earnings are not subject to federal tax and in many cases, state taxes. Some states also provide a tax deduction. A list of 529 plans by state can be found here.

One difference between a 529 plan and other investment options is that some states allow for a prepaid tuition option where you can lock in today’s tuition costs. Moreover, 529 accounts allow family and friends to contribute monetary gifts to the account. So instead of spending $100 on the latest gadget, grandparents can give their grandchildren a gift that will continue to grow until college, says CFP Board Ambassador David Zuckerman, CFP®.

“One of the biggest challenges associated with 529 plans is lack of awareness,” says Zuckerman. “A survey shows that less than half of Americans are utilizing the plans, which means families are leaving money on the table in terms of tax savings and the long-term growth these plans offer. As one of the most important tools available to combat the rising cost of education, it’s important for consumers to understand the nuances of the account to maximize its value as a planning tool that can help cover the cost of tuition, room and board, and other college expenses.”

To ensure you make the most out of your 529 plan, Zuckerman outlines four strategies to maximize the potential of the account: 

  • Control fees and expenses. It’s important to find a plan that can meet your objectives without costing too much. Countless academic studies show that high fees eat away at returns over time, so be aware of the fees associated with your account to ensure they’re not hurting returns.
  • Start to save early. The earlier the better is the rule of thumb for starting a 529 plan. Investing early will allow your investments to compound over time.
  • Plan diligently and read the fine print. Thoroughly research age-based portfolios and other investment options to find the best fit for your individual situation. It’s also important to note that 529 plans typically have more restrictions than other investment accounts, and assets held in 529 plans will generally impact eligibility to receive need-based financial aid.
  • Balance your 529 funding strategy. A common pitfall is prioritizing 529 plan contributions over retirement savings. Remember that student loans can be obtained, but no such loans are available to fund retirement. 

Read Zuckerman’s full blog post here with more details.

For more guidance on making the most of your 529 plan, talk to a CERTIFIED FINANCIAL PLANNER™ professional today or visit


Certified Financial Planner Board of Standards, Inc. is the professional body for personal financial planners in the U.S. CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services – so that the public has access to and benefits from competent and ethical financial planning. CFP Board, along with its Center for Financial Planning, is committed to increasing the public’s awareness of CFP® certification and access to a diverse, ethical and competent financial planning workforce. Widely recognized by firms and consumer groups as the standard for financial planning, CFP® certification is held by more than 83,000 people in the United States.


Dan Drummond, Director of Communications
Mobile: 202-243-8621