Suggested Asset Allocation for Your 529 Plan

Since we’ve been covering college savings and 529 plans here lately, I thought it made sense to have a quick discussion about how you might consider investing your funds with your 529 savings plan. Let’s discuss how to achieve a proper asset allocation within your 529 plan.

What is Asset Allocation?

Asset allocation is spreading your money over different types of asset classes. The three types of asset classes are stocks, bonds, and cash. If you’re investing for the long-term you can reduce your risk by allocating your funds across these different assets. Each asset responds differently to the various changes to the economy/market. Therefore, you’re less likely to see all your investment money go down because all three asset classes are unlikely to go down at once.

Two things typically affect your asset allocation decision: your own time horizon and your own risk tolerance. This is very personal decision.

Should Asset Allocation Be Different for a 529 Plan vs Retirement Savings?

It may not be. But typically since the time horizon for needing college funds is tied to the age of your child, and because your risk tolerance for those funds may be different, the asset allocation is different. You may not be retiring for 25 years, but your 5 year old child will need his college savings in 13 years.

Likewise, you may be more willing to risk your retirement savings vs risking your child’s education savings. Only you know. But, there are some suggestions out there. I stumbled upon these suggested asset allocations percentages while sorting through my mail from the CollegeAdvantage 529 Savings Plan:

Suggested Asset Allocation for Your 529 Plan

Child's AgeConservativeModerateAggressive
5 and Under50% Stocks / 50% Bonds75% Stocks / 25% Bonds100% Stocks
6-1025% Stocks / 75% Bonds50% Stocks / 50% Bonds75% Stocks / 25% Bonds
11-1575% Stocks / 25% Cash25% Stocks / 75% Bonds50% Stocks / 50% Bonds
16-1875% Bonds / 25% Cash75% Bonds / 25% Cash25% Stocks / 75% Bonds
19 and Up100% Cash75% Bonds / 25% Cash75% Bonds / 25% Cash


Remember that your own asset allocation decisions could vary greatly from this. These are just suggestion.

Mrs. PT and I just opened our 529 savings plan and we have the contributions going to a Vanguard aggressive age-based fund (0.23% expense fee). We’re along way from needing the funds (17 years) and we are comfortable investing 100% in stocks, so we felt like this was a smart option.

See the third column below for how our asset allocation will change over time. Of course, we’re just getting started and so we may adjust and invest directly in funds to have bit more control.

Asset Allocation of Vanguard Age-Based Options at CollegeAdvantage

How do you have your assets allocated in your 529 savings plan portfolio? Is it similar to the chart above?

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Last Edited: July 26, 2017 @ 5:04 pmThe content of is for general information purposes only and does not constitute professional advice. Visitors to should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.
About Philip Taylor

Philip Taylor, aka “PT”, is a CPA, financial writer, podcaster, FinCon Founder, husband, and father of three. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or Google+. Listen to the new podcast, Masters of Money!


  1. We’re in the collegeadvantage program too!

    We choose the Vanguard Agressive Age based one, our kids are 6 and 9…

    I think you’re wise to get in while the market has had it’s knees knock out from under it.

  2. I have recently started my Roth IRA and set up a life cycle account where Vanguard selects the Assets and allocates based on the year I want to retire, and handles all things for me. It probably is about 85% of potential earnings but it is care free and I am uneducated about doing it on my own, so it works for me and leaves me stress free.