529 assets spiked in 2Q, but still were off '08 levels

Assets in Section 529 college savings plans are beginning to recover from last year's sharp drop, climbing to an estimated $98.6 billion in the second quarter, up 15% from first quarter assets of $85.9 billion.
AUG 17, 2009
Assets in Section 529 college savings plans are beginning to recover from last year’s sharp drop, climbing to an estimated $98.6 billion in the second quarter, up 15% from first quarter assets of $85.9 billion. Despite the recent improvement, however, 529 assets levels are 11% lower than they were one year ago, when there $110.6 billion in these plans, according to data from the Financial Research Corp. of Boston. Net new cash in the plans also improved dramatically in the second quarter, rising to an estimated $2.4 billion, from $1.7 billion in the first quarter. But a year-over-year comparison shows that net new cash, or gross sales minus redemptions, were down 41% from last year’s the second-quarter total of $4.1 billion, according to FRC. The latest figures are a “positive sign for the industry,” according to Bridget Bearden, a research analyst for FRC. “Despite the economy and unemployment reaching 10%, we’re seeing that people are still able to contribute to 529 plans,” Ms. Bearden said. “And the quarter-to-quarter increases might signify a return to the sales cycle pattern of the past.” The market’s upswing in the last quarter has helped diminish losses incurred last year, said Peter Mazareas, chief executive of Nahant, Mass.-based Strategic Advancement Group Inc. and vice chairman of the Washington-based College Savings Foundation. “If people didn’t have to take a distribution last year, they feel better and they are continuing to contribute regularly, if not cautiously,” Mr. Mazareas said. “We’re seeing a relatively small number of non-qualified distributions, where people take money out of accounts because of fear. Most people have age-based accounts, and they are staying in.” The estimated total assets in 529 plans at the end of last year were $88.5 billion, down from $112 billion at the end of 2007.

Latest News

Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says
Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says

A new analysis finds long-running fiscal woes coupled with impacts from the One Big Beautiful Bill Act stand to erode the major pillar for retirement income planning.

SEC bars New Jersey advisor after $9.9M fraud against Gold Star families
SEC bars New Jersey advisor after $9.9M fraud against Gold Star families

Caz Craffy, whom the Department of Justice hit with a 12-year prison term last year for defrauding grieving military families, has been officially exiled from the securities agency.

Navigating the great wealth transfer: Are advisors ready for both waves?
Navigating the great wealth transfer: Are advisors ready for both waves?

After years or decades spent building deep relationships with clients, experienced advisors' attention and intention must turn toward their spouses, children, and future generations.

UBS Financial loses another investor lawsuit involving Tesla stock
UBS Financial loses another investor lawsuit involving Tesla stock

The customer’s UBS financial advisor allegedly mishandled an options strategy called a collar, according to the client’s attorney.

Trump's one big beautiful bill reshapes charitable giving for donors and advisors
Trump's one big beautiful bill reshapes charitable giving for donors and advisors

An expansion to a 2017 TCJA provision, a permanent increase to the standard deduction, and additional incentives for non-itemizers add new twists to the donate-or-wait decision.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.