NEWTON, Mass.--(BUSINESS WIRE)--Ascensus College Savings, one of the nation’s largest administrators of 529 plans, celebrates 529 College Savings Day® with the release of its Inside 529: The 2016 Ascensus College Savings Plan Report.
Ascensus College Savings currently administers over 3.5 million 529 plan accounts, representing more than 27 percent of the total 529 accounts administered across the nation. The company provides services for 31 plans across 17 states and ranks as the #1 529 program manager in the nation.1
As one of the largest recordkeepers in the industry, Ascensus College Savings is in a unique position to shed light on how families are using 529s to save for post-secondary education. In 2015, Ascensus College Savings processed over 18 million individual contributions to and nearly 800,000 qualified withdrawals from 529 accounts. When analyzing year-end data across its platform, Ascensus College Savings identified the following trends:
- The average balance across all accounts was $20,070.
- In 2012, there were over $21 million in Ugift® contributions made to Ascensus College Savings 529 accounts. In 2015, this amount increased by 299 percent to over $87 million in Ugift contributions.
- Over 75 percent of individual contributions made in 2015 were $200 or less.
- Sixty-one percent of accounts had total annual contributions of $2,000 or less.
- Seventy percent of withdrawals from 529 accounts that account owners identified as qualified were for $5,000 or less.
The report’s findings suggest that 529s are predominantly used to save steadily during a beneficiary’s childhood. By making strategic and modest withdrawals over the course of a student’s education, 529 savers appear to be lessening their reliance on loans which could otherwise put both parents and students in debt post-college.
“Saving for higher education doesn’t have to mean saving to cover all of tuition and related expenses,” states Jeff Howkins, president of Ascensus College Savings. “Each dollar saved in a 529 plan is a dollar that doesn’t need to be paid back with interest in the future, and our data shows that more families are embracing this concept. When it comes time to finance a child’s four-year college, community college, or trade school education, 529 funds can make a meaningful impact for those who have the foresight to save.”
By using 529 plans, families and individuals can save for the increasing cost of higher education at eligible schools nationwide, including four-year universities, community colleges, and vocational schools (most accredited schools are eligible). The benefits of 529 plans include a range of investment options, account owner control of the account, tax advantages for qualified withdrawals,2 flexibility to change beneficiaries, and much more. For more information on 529 plans, please visit www.AscensusCollegeSavings.com.
Ascensus is the largest independent retirement and college savings services provider in the United States, helping over 6 million Americans save for the future. With more than 35 years of experience, the firm partners with financial institutions to offer tailored solutions that meet the needs of financial professionals, employers, and individuals. Ascensus specializes in recordkeeping, administrative, and program management services, supporting over 40,000 retirement plans and over 3.5 million 529 college savings accounts. It also administers more than 1.5 million IRAs and health savings accounts and is home to one of the largest ERISA consulting teams in the country. For more information about Ascensus, visit www.ascensus.com.
1 According to Strategic Insight’s 529 College Savings Quarterly Data Update for the first quarter of 2016, Ascensus College Savings ranked #1 529 program manager in the U.S. for assets under management.
2 Earnings on nonqualified withdrawals are subject to federal income tax and may be subject to a 10 percent federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent upon meeting certain requirements.
For more information about 529 plans managed or administered by Ascensus College Savings call 1-877-529-2980 or visit www.AscensusCollegeSavings.com.
Before investing in any 529 plan, you should consider whether your or the designated beneficiary's home state offers a 529 plan that provides its taxpayers with state tax and other benefits that are only available through the home state's 529 plan. You also should consult your financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state's 529 plan(s), or any other 529 plan, to learn more about those plans' features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.
Investment objectives, risks, charges, expenses, and other important information such as specific benefits, limitations, rules and guidance are included in a 529 plan's offering statement; read and consider it carefully before investing.
When you invest in a 529 plan you are purchasing municipal securities whose value will vary with market conditions. Investment returns will vary depending upon the performance of the portfolios in the 529 plan you choose. Depending on market conditions, you could lose all or a portion of your money by investing in a 529 plan. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences. Carefully read any disclosure statements and detailed information relative to your investment goals or needs, or consult with a tax advisor for their specific tax applications or consequences.