529 Plan Details:
Enter your state:
World's Simplest College Calculator:
How old is your child?
Find a 529 Pro:
Enter your zip code:
Enroll In a 529 Plan:
Move money from loser 529 to new plan
My New York 529 plan is invested in aggressive growth funds, (and) the balance went aggressively down. They won't allow a transfer of the existing funds into a different fund. Can I withdraw the funds and transfer into another plan with a safer fund?
Unless you have already made two investment changes in 2009, I see no reason for you not to be permitted an investment change in your current 529 account. The New York 529 plan has several investment options from which to choose, ranging from aggressive to conservative, and the longstanding rule of the IRS is that you may switch your investment among those options once per calendar year. A special rule for 2009 allows two investment changes in this year only.
I suggest you call the plan's toll-free number, (877) 697-2837, and inquire further. It's likely there was a misunderstanding initially. Alternatively, log in to your account online and electronically request an investment change.
Another route would be to transfer from your current 529 plan to another 529 plan through a "rollover." A qualifying rollover is not a distribution for federal tax purposes, and your original cost basis carries over to the new 529 plan. You are limited to one rollover per beneficiary in any 12-month period. Although this may be a great strategy for accounts that have gained in value, you may instead want to consider liquidating your "underwater" 529 account and claiming the loss as a miscellaneous itemized deduction on your 2009 taxes.
If you are a New York resident, you must have claimed a deduction on your state income tax returns for at least some of the contributions you made to the New York 529 plan. If you take a nonqualified distribution now or roll over to another 529 plan, New York state recaptures the tax benefit by requiring that you report prior deductions as income on this year's New York tax return. For this reason alone, you are probably better off staying in the New York 529 plan and making whatever investment changes you believe are best.
Other recent questions»Top 529 Plan Withdrawal Tips. (Video) (03/30/2017)
»What are the 3 biggest 529 plan myths? (Video) (03/17/2017)
»Does a 529 plan affect financial aid? (Video) (03/16/2017)
»How much does college cost? (Video) (03/15/2017)
»What Are The Top 7 Benefits Of 529 Plans? (Video) (03/14/2017)
»529s and Financial Aid (Video) (11/19/2014)
»What are the best ways to maximize the savings in my 529 plan? (Video) (10/14/2014)
»What are the steps involved in setting up a 529 account? (Video) (09/15/2014)
»What is the first step in getting started with a 529 plan? (Video) (09/05/2014)
»Coverdell ESA vs. 529 Plan: Which to choose? (Video) (07/15/2013)
»What is the best 529 plan for me? (Video) (07/10/2013)
»What happens to my 529 if my child gets a scholarship? (Video) (07/02/2013)
»Can grandparents open a 529? (Video) (06/20/2013)
»Do I have to use my own state's 529 plan? (Video) (06/12/2013)
»529 Plans: Tax Benefits of a 529 Plan (Video) (06/07/2013)
»What are the Pros & Cons of 529 plans? (Video) (05/30/2013)
»What is a 529 College Savings Plan? (Video) (05/21/2013)
»Expected addition to the the family (04/16/2013)
»Naming a successor to your 529 account (Video) (05/11/2012)
»Finding the Right Coverdell ESA (Video) (09/16/2011)
My College Savings
Help us personalize our site for you.