Ask Money

Multiple 529s

Chris Farrell Apr 9, 2010

Question: My wife and I have a 529 plan for our two year old daughter. My parents also have a 529 plan for her. Would multiple 529 plans affect her future college financial aids compared to just having one with the same amount of cash? Would it be better for my parents to give us the money to put in our 529 plan or have them contribute to their 529 plan opened up in our daughter’s name directly? Thanks for all your financial help. Paul, Ashburn, VA

Answer: The number of accounts doesn’t matter to the financial college aid calculation. The finance office will take into account the total amount that has been set aside in all her 529 savings plans. One plan managed by you is enough from a convenience point of view. As you say, your parents could imply contribute to the plan when they want. However, your parents might be reluctant to give up control over a 529. They may want to invest the savings differently than or retain the option of changing beneficiaries. In that case, two plans are fine. But I see no reason to have more plans than that.

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