By far, the greatest concentration of 529 plans are in Baby Boomer households – those above the age of 58 – which own 10.5 million of the 18.4 million 529 plans in the market. This was followed by 5.4 million plans owned by members of the Mature generation – those between the ages of 39 and 57 – and Generation X – those between the ages of 25 and 38, according to Generational 529 Plan Challenges and Opportunities release by MFS.
Not surprisingly, the Boomer generation is also the most aware, with more than half (54.2%) cognizant of 529 plans, versus 42.8% of Matures with 529 plan familiarity and 40.5% of GenXers. Yet, it is Generation X that has the most children under 18 in their house (57 million), followed by Baby Boomers (36 million) and Matures (4 million).
Across all three generational groups, the most important factor in selecting a 529 plan was the ability to control assets and to control related distribution options, selected by 42% of matures, 53% of Boomers and 45% of GenXers. Results were fairly consistent throughout other important considerations with the exception of aggressive growth. Where matures did not rate this as important at all, and only 8% of Boomers gave some importance to this consideration, 25% of GenXers said aggressive growth was an important consideration. Similar polarization was seen for estate planning, viewed as important for 19% of Matures, 1% of Boomers and none of the GenXers. Other important considerations for all age groups were tax implications and principal protection.
Generations were less divided when it came to the investment option that there were most attracted to. All groups agreed that age-based portfolios were the best bet for their 529 plans, followed by individual mutual funds, asset allocation funds, and static/fixed percentage funds.