Market volatility has spurred many affluent investors with young children to change college savings arrangements.
Researchers at Phoenix Companies Inc., Hartford, have published that finding in a summary of results from a recent survey of 1,735 U.S. households with $1 million or more in net worth.
About 31% of the high-net-worth participants with children ages 18 and under said they have at least one 529 college savings plan, the Phoenix researchers report.
About 22% of high-net-worth parents with 529 plans said they had changed plan investments due to the recent economic turmoil, and some said they had made more than one change.
About 68% of the participants who made changes moved moved money to a more conservative asset-allocation position, and 31% moved assets to a guaranteed investment. But 28% said they had shifted to a more aggressive asset-allocation position.
Phoenix researchers found that 9% of the participants had moved assets to a pre-paid plan, from a savings plan. A pre-paid plan allows parents to pay all or part of the costs of education at an in-state public college in advance.
Phoenix researchers also found that 70% of the participants with 529 plans remained confident that the plans would achieve the college savings goals the participants had when they opened the accounts.
But because of the recent market volatility, 19% said they expect to change their college funding strategies. About 19% of these parents now expect to seek out financial aid, 16% have set sights on less expensive schools, 13% plan to seek out help from relatives, and 12% want to delay plan beneficiaries’ attendance at college. The remainder either said they had not thought about making changes or had made other types of changes.