Key Points
Most 529 plans offer age-based tracks (automatic de-risking) and custom portfolios. For most families, a low-cost age-based index fund track is optimal -- it automatically shifts from aggressive to conservative as college approaches without requiring ongoing management.
529 age-based portfolio allocation by child age
| Child Age | Typical Age-Based Portfolio | Equity % | Bond/Stable % |
|---|---|---|---|
| 0-5 years | Aggressive growth | 85-90% | 10-15% |
| 6-10 years | Moderate growth | 70-80% | 20-30% |
| 11-14 years | Balanced | 50-65% | 35-50% |
| 15-16 years | Conservative growth | 30-40% | 60-70% |
| 17-18 years | Capital preservation | 10-20% | 80-90% |
Many 529 plans now offer index fund options with expense ratios of 0.10-0.25%. If your plan offers an S&P 500 or total market index fund for the equity component, use it. A 0.50% fee difference over 18 years reduces your balance by 10-12%.
What This Means for You
- Age-based tracks are appropriate for most families -- low maintenance and systematic
- Actively managed funds charge 0.50-1.00%+ vs 0.10-0.25% for index funds -- meaningful difference
- Most plans allow switching investment options twice per year without penalty
- For money needed in less than 5 years, hold mostly stable value or bond options
- Compare plan expense ratios on savingforcollege.com or the plan’s own fee disclosure
Calculate Your College Savings
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