Many families that could benefit from 529 plans are simply not taking advantage of them due to confusion and lack of awareness.
Pittsford, New York (PRWEB) April 17, 2015
Savingforcollege.com's second Annual College Savings Survey indicates that while 75% of parents and grandparents are very confident that their children or grandchildren will attend college and want to help fund it, 59% have not yet begun to save. Similar to 2014 findings, those who are not saving cite a lack of time to research and understand their savings options as the biggest deterrent to starting to save.
Savingforcollege.com, a leading independent college savings resource and authority on 529 plans, administered the survey to over 1,600 website visitors, shedding light on the college savings behavior of parents and grandparents in the United States. Particular emphasis was placed on usage of and beliefs concerning 529 plans.
Survey data shows that 529 plans continue to be the most widely used savings tools, selected as the vehicle of choice by 55% of respondents who are currently saving for college, and 52% of those who plan to start saving in the near future. However, 45% were unsure if they would use a 529 plan for college savings, and there is significant misunderstanding of the rules associated with 529 plans as well as confusion regarding the 529 plan enrollment process. One of the most common misconceptions, held by 20% of respondents, is that 529 plan users must open plans offered by their state of residence. In fact, college savers can open 529 plans offered by another state.
Among respondents who intend to open a 529 plan, 86% admitted that they do not know the steps involved, and 45% percent were unsure of which investment options they would choose. Ironically, the majority of respondents stated they did not plan on consulting a financial advisor for help in selecting and enrolling in a plan, stating that they were comfortable researching and understanding investment options on their own.
“Many families that could benefit from 529 plans are simply not taking advantage of them due to confusion and lack of awareness,” says Savingforcollege.com CEO Marcos Cordero, “It is imperative that the industry play an active role in educating parents and grandparents on the many advantages of these plans so that they can begin to save as early as possible.”
The Annual College Savings Survey was administered online by Savingforcollege.com between January 23 and February 23, 2015. 1,610 respondents completed the survey. For more information or to download the comprehensive PDF report, visit http://www.savingforcollege.com/survey.