Most Americans Unfamiliar With 529 Plans
Jun 2, 2012
Knowledge of 529 plans rises with the level of income of the survey panel. Only 27% of respondents making less than $35,000 per year properly noted which was a 529 plan. With respondents with income between $75,000 and $100,000 per year the percentage rose to 57%. People who made $100,000 or more had a 62% positive response to what a 529 plan was.
It makes sense that people who earned an above average income knew more about 529 plans. Knowledge of this type goes hand in hand with knowledge of IRA's and saving for retirement, among other different saving vehicles.
According to the survey, almost half of the family's with children were aware of the 529 plan and what it does.
Why is there such a lack of knowledge on 529 plans? If the survey was on IRAs and Roth IRAs I am sure the number of people with knowledge of these products would be nearly 100%. Saving for retirement, which we all focus on throughout our working life, is on our minds through the large amount of advertising the investment house and brokerages invest in.
With 529 plans the level of advertising is almost nil because the investment industry does not sell these items. All the 529 plans sold today come from state operated college savings plans. Yes, many of the most popular brokerage house run these plans but they are not responsible for the promotion of them.
The individual states who operate 529 plans do a poor job of letting us know they even exist. The have not educated the public of these services and what the can do for a family's college saving plans. They need to do better in there promotion and education of the public to their benefits.