A new survey indicates 529 plans are losing the battle for recognition,
Sixty-six percent of those surveyed say the do not know what a 529 plan is, according to the annual 529 Plan Awareness Survey, which has been conducted by Edward Jones for four years.
Only 34 percent could correctly identify a 529 plan as a college savings tool from among four potential options. This is an increase from 30 percent who said they knew what the plans were last year, but is down from the 37 percent who could identify the plans in the inaugural survey in 2012.
“Despite headlines focused on the increasingly high costs of college, we still see a significant number of Americans who aren’t aware of one of the most important long-term savings vehicles that can help minimize the impact that the cost of education has on families,” said Steve Seifert, principal at Edward Jones. The 529 Plan Awareness Survey included 1,008 participants.
“Demographically, people are living longer and having children later in life, narrowing the time between a child’s college bills and his or her parents’ retirement age. This, coupled with the fact that the cost of college is increasing at a much higher rate than inflation, means that many are grappling with how to stay on track to meet savings goals,” Seifert said.
Awareness varied by several factors, including household income and age of children. Respondents with a household income of $100,000 or more are significantly more likely to correctly identify 529 plans (58 percent), than those with less than $35,000 (25 percent), the survey shows.
Surprisingly, respondents with children ages 13 years old to 17 years old were less likely (35 percent) to correctly identify the college savings plan than those with children under the age of 13 (41 percent), according to Edward Jones.
As part of an effort to raise awareness for 529 plans and college savings techniques, Edward Jones said its branches will recognize May 29 as Save for Education Day with community events.