How to choose the right 529 portfolio for your future college student

What’s in a name? From Generation Z to Alpha babies, the time to save is now.

You’ve heard of the baby boomer generation, followed by Generation X, the Millennial generation, and Generation Z. It’s enough to make most readers feel old, but it doesn’t stop there. Just the other day, I read about “Generation Alpha” — the next wave of kids born between 2013 and 2025.

Alpha, the Greek letter, seems to be the label given to Generation Alpha by the unofficial namers of generations — academics, market researchers, and cultural observers. We will see if this label lasts (remember the less successful “MTV generation?”), but for now, Generation Alpha seems to be the frontrunner.

I started thinking about the significance of these names back in June, after CollegeBound 529 launched the Invesco CollegeBound 2039-2040 Portfolio. It’s hard to believe we’re already planning around a college enrollment date of 2040, but for the parents of the current and future Generation Alpha babies, that day will arrive before they know it.

As the father of three college graduates, I’ll be the first to urge new parents to start saving now. The sooner you can begin funding your child’s higher education, the more time that money has to grow. But every family is different, and the college savings strategy that works for one family may not be right for another. That’s why I believe it’s crucial to find a portfolio that works for your savings approach, from your child’s college enrollment date to your personal level of risk tolerance.

CollegeBound 529 offers college savers three types of 529 portfolios to fit their unique needs and timelines:

  • Age-based portfolios
    • Investors can pick from 11 options designed around the student’s expected year of college enrollment.
    • Portfolios come in two-year increments to better align with the student’s age and college timeline.
    • Portfolios are regularly rebalanced, with allocations becoming more conservative as the expected date of college enrollment gets closer.
    • Portfolios are built to help outpace the rising costs of a college education.
  • Target-risk portfolios
    • College savers can select from three portfolios designed around different levels of risk — conservative, moderate, and growth.
    • The portfolios combine different investment strategies and fund types to target cost-efficiency and risk-adjusted returns.
    • Portfolios are regularly rebalanced to stay in line with their target levels of risk.
  • Individual portfolios
    • These 11 individual portfolios are invested in a single underlying investment.
    • Investors can choose from equity, fixed income, balanced, and capital preservation options.1
    • These portfolios serve as building blocks across major asset classes to help college savers diversify their investments.

When it comes to saving for college, don’t wait. Talk to your financial professional about finding the right 529 portfolio for your family’s needs, and start contributing as much as possible — from the smallest birthday check from grandma to your annual bonus. Remember: you don’t have to save 100% of future college costs; you just have to get started.

To learn more, visit CollegeBound529.com today.

1 The Invesco Stable Value Portfolio is a fixed income, total return strategy that is designed to provide daily liquidity and principal preservation.  Capital preservation guarantee provided by the wrap contract providers; subject to the creditworthiness of those providers and terms of the contracts.

Important information

Blog header image: Kristen Curette & Daemaine Hines / Stocksy

Diversification does not guarantee a profit or eliminate the risk of loss.

Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program.

For more information about CollegeBound 529, contact your financial advisor, call 877-615-4116, or visit www.collegebound529.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Invesco Distributors, Inc. is the distributor of CollegeBound 529.

An investment in the Portfolios is subject to risks including: investment risks of the Portfolios which are described in the Program Description; the risk (a) of losing money over short or even long periods; (b) of changes to CollegeBound 529, including changes in fees; (c) of federal or state tax law changes; and (d) that contributions to CollegeBound 529 may adversely affect the eligibility of the Beneficiary or the Account Owner for financial aid or other benefits. For a detailed description of the risks associated with CollegeBound 529, and the risks associated with the Portfolios and the Underlying Funds, please refer to the Program Description.

Thomas Rowley
Director, Retirement and Education Strategies

Thomas Rowley is director of retirement and education strategies and one of Invesco’s most frequently requested speakers. He provides analysis of the evolving retirement landscape and develops actionable strategies to help investors and financial advisors maximize their retirement-planning opportunities. Mr. Rowley regularly shares his insights online at invesco.com/us in addition to his speaking engagements.

Mr. Rowley’s insights reflect more than 20 years of experience in the investment industry. He translates his comprehensive knowledge of retirement planning into lively, clear explanations of the complexities of legislative, investing, tax and social issues.

Mr. Rowley shares his analyses of retirement-related issues through regular personal appearances, continuing education webinars and Web-based commentaries.

More in Retirement & College Savings
401(k) plan participants continue to save during pandemic

Despite uncertain market conditions during the COVID-19 pandemic, Americans continued to save for retirement through defined contribution (DC) plans in the first quarter of 2020,...

Close