As you move toward any investing goal, including college, it’s important to have the appropriate mix of assets and risk level during each stage you go through.

I’m in the earliest stage myself, saving for my son, who’s about to turn 2. Since we’ve got about 16 more years to go, we can afford to take on a bit more risk to get the potential for more reward. Meanwhile, my colleague Kim Stockton (with whom I’ve been studying college savers’ investing behavior) has kids aged 10 and 14. She’s getting closer to the tuition-check-writing stage, so while she’s still looking for growth, she’s also growing aware that she’s getting closer to the time she’ll need to preserve principal to pay expenses.

Kim and I have been spending a lot of time diving into the investing trends of nearly 1.3 million investors across five 529 college savings plans*. The patterns of people in that check-writing stage (19 years +) showed the amount of stocks in their portfolios weren’t always aligned with their need to preserve savings to meet tuition demands.

While it’s not uncommon for investors to combine 529 savings with assets in other account types, everyone should be mindful of their asset allocations at all points in their college-savings lifecycle. Stocks are generally more volatile than bonds and cash reserve holdings. That’s why it’s prudent to hold less of them as you get closer to the spending stage.

Using age-based portfolios that move along a “glide path” and become progressively more conservative as the target age approaches helps reduce the amount of stocks—and the associated risk—by the time investors need to start using their savings. Most 529 plans offer age-based options. And our research found that 70% of investors use them.

Our research data proves this point. Sixty-six percent of investors who are saving for someone aged 19 or older and are not using age-based options held more than 20% in stocks. Meanwhile, only 13% of 529 savers using age-based portfolio options built on Vanguard-research-based best practices had more than 20% in stocks. It can be tough to shift from the growth perspective to the capital preservation one. It’s a challenge many retirement savers face, too. Seeing an account balance hold steady or even go down as you start using the assets to pay for expenses goes counter to years of habit strategizing for growth.

As I’ve observed, having an age-based component, where the shift is automatic, helps make the transition to a less volatile allocation easier. That shift provides some protection against market downturns (part of any investing cycle) when you don’t have time to wait them out before tapping your account to pay for college expenses.

I urge every investor to be mindful of your allocation at each age. No matter your reason for investing, you want to be sure your asset balance is appropriate for the amount of time you have before you need to start taking withdrawals. If you’re unsure of what that balance looks like for your college savings account, consider looking at an age-based portfolio’s allocation—or investing in one.



Editor’s note: This article originally appeared on

*Including The Vanguard 529 College Savings Plan, CollegeInvest Direct Portfolio College Savings Plan [Colorado], College Savings Iowa 529 Plan, MOST—Missouri’s 529 College Savings Plan, and New York’s 529 College Savings Program Direct Plan.

For more information about any 529 college savings plan, contact the plan provider to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. If you are not a taxpayer of the state offering the plan, consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Vanguard Marketing Corporation serves as distributor and underwriter for some 529 plans.

Investment returns are not guaranteed, and you could lose money by investing in a 529 plan.