Doing the Math: How Many 529 Plans Do You Need for Your Family?

What to consider when saving for multiple children’s college educations

Paying for college can be expensive, especially when you have multiple children. A 529 college savings plan can be a great way to save for their higher education needs — but should you use one account or a separate account for each child? As a father of three kids, I know that sharing toys among siblings can be nearly impossible. Sharing a 529 isn’t impossible — but is it the best solution? Let’s find out.

Pros and cons: Opening a single 529 account for multiple children
Using one 529 account for all your children can certainly reduce the amount of paperwork and fees you face — and that’s music to every parent’s ears. However, it may also limit the amount of money you can contribute toward each child’s education before encountering a gift tax.

In addition, a single 529 plan allows only one beneficiary at a time, though the beneficiary can be updated at any time by completing a beneficiary change form. To avoid tax penalties, the new beneficiary must be a member of the family of the original beneficiary. For parents with multiple children in college at the same time, trying to use funds for more than one child could trigger taxes or penalties — not a great option when you’re already trying to save!

What’s more, a single account can also complicate your investment plan. Generally, college savers choose investments focused on growth in the early years and shift toward more conservative investments as college enrollment nears. When multiple college timeframes are involved, it’s more difficult to choose the right investments.

Pros and cons: Opening a separate 529 account for each child
Opening separate 529 plans means each account’s investment objective can be as unique as your child, from timeframe to risk tolerance. This lets you take a more conservative investment approach when your savings timeline is shorter, while maintaining a more growth-oriented strategy for children with many years to go before starting college.

Because each account is separate, you’ll also enjoy tax- and penalty-free savings for qualified expenses, like tuition, fees, books, and room and board, for each beneficiary without worrying that your first child’s education might deplete your other children’s savings. In fact, account owners can roll over funds from one account to another every 12 months, which means that any leftover savings for one child may be used for your other children’s educations.

Your financial advisor can help you select the right savings approach for your family and can tell you more about the CollegeBound 529 plan by Invesco. Visit CollegeBound for more information and planning tools, like our helpful college savings calculator, that can help you design a customized savings plan for each of your children.

Read more expert views on college savings plans.

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 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.

Mr. Rowley has been director of retirement business strategy since 2010. Prior to joining Invesco in 2010, he was in charge of individual retirement plan products and Retirement Marketing at Van Kampen.

Prior to joining Van Kampen in 1996, he was a 401(k) regional sales director with an investment firm. His experience also includes seven years in retirement plan operations and three years as head of a brokerage firm’s retirement help desk. He began his career in the Treasury bond futures pit at the Chicago Board of Trade.

Important information

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Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other benefits 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 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.

The information provided is for educational purposes only and does not constitute a recommendation of the suitability of any investment strategy for a particular investor. Invesco does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state tax laws are complex and constantly changing. Investors should always consult their own legal or tax professional for information concerning their individual situation. The opinions expressed are those of the authors, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

All data provided by Invesco unless otherwise noted.

Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail products and collective trust funds. Invesco Advisers, Inc. and other affiliated investment advisers mentioned provide investment advisory services and do not sell securities. Invesco Unit Investment Trusts are distributed by the sponsor, Invesco Capital Markets, Inc., and broker-dealers including Invesco Distributors, Inc. Each entity is an indirect, wholly owned subsidiary of Invesco Ltd. PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC, investment adviser. Invesco PowerShares Capital Management LLC (PowerShares) and Invesco Distributors, Inc., ETF distributor, are indirect, wholly owned subsidiaries of Invesco Ltd.

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Doing the math: How many 529 plans do you need for your family? by Invesco

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