529 plans provide tax-advantaged benefits for parents, guardians, family and friends to contribute to qualified education costs, ranging from tuition and books to laptops and room and board fees.
So, why is it that Americans are still vastly unaware of what the tool is?
New findings from Edward Jones shows that 52% of Americans are unaware of what a 529 plan is, and only 14% have either used or say they’re planning to incorporate the tool as part of their education savings strategy.
The data opens up a larger discourse about the need for financial education and accessibility surrounding professional guidance. When respondents were educated about the benefits of 529 accounts, 57% said they were more inclined to participate in the feature.
While 78% of respondents say they wouldn’t consult a financial advisor prior to making decisions about educational savings, just 21% believe that working with a professional would help them feel more confident in covering the cost of future education expenses.
Edwards Jones notes that financial advisors can act as an “impartial third party” for participants wanting to seek tailored educational strategies that align with their long-term goals and retirement objectives. According to the findings, 38% of respondents are saving enough to reach their future educational goals, down from 40% in 2024. Only 28% of Gen Xers believe they are allocating enough to these targets.
On the other hand, younger generations like Millennials and Gen Zers have foregone applying to higher education programs due to inflation, higher costs, and a lack of awareness on the tool. Forty-one percent of Gen Zers and 29% of Millennails would rather look for full-time employment or an internship than enroll in a graduate program.
“It’s important for Americans to understand how flexible 529 plans have become. But what’s even more important is engaging with a financial professional who’s dedicated to educating you on your options, sorting through the most appropriate options and providing clear direction on what actions to take,” said Andy Esser, a Durham, NC-based financial advisor at Edward Jones.
SEE ALSO:
· Savers Still Unaware of 529 Features
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.