Why Hasn’t My 529 Plan Increased in Value?

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Mark Kantrowitz

By Mark Kantrowitz

August 21, 2020

There are several reasons why a 529 plan might not have appreciated in value. A 529 plan may not have increased in value because of the choice of investments, high fees and commissions.

After a 529 plan is funded, the account owner must choose investments for the 529 plan. If the account owner did not choose any investments, keeping the funds in cash, the 529 plan will not have grown in value.

Some 529 plan investments, such as stock mutual funds, can lose value. It is possible that the 529 plan grew in value, but then stock market losses caused a decline in the value of the 529 plan. The stock market generally experiences at least three corrections (drops of 10% or more) and at least one bear market (drops of 20% or more) over any 17-year period.

If a 529 plan charges high fees, the fees could have eroded the value of the 529 plan, especially if the 529 plan is invested in certificates of deposit, money market accounts and other safe but low return investments.

Advisor-sold 529 plans may charge commissions, which reduce the value of the 529 plan. It can take several years before enough earnings accumulate to compensate for the cost of the commissions. 

A good place to start:

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