2009 Brings More Latitude to 529 College Savings Accounts

If you take part in a 529 plan as part of saving for your child's future college education, but have been frustrated by the lack in flexibility in choosing investment strategies, a ruling by the U.S. Treasury Department and the Internal Revenue Service should be of some interest.

For 2009, owners of 529 accounts are permitted to changed their investment strategy twice per calendar year as opposed to previous years where only one change was allowed. College savings groups are lobbying to make the change permanent.

A Section 529 plan is a tax-advantaged college savings plans run by an individual state or educational institution. It is named after Internal Revenue Code Section 529.

"We appreciate the steps the Treasury and IRS have taken to give 529 plan participants more flexibility when it comes to changing the direction of their account investments in 2009," said Jackie Williams, executive director of the Ohio Tuition Trust Authority and immediate past chair and spokesperson for the College Savings Plans Network.

In a press release, the CSPN said the change in policy is "a direct response to current conditions in the financial markets and a desire to give investors more flexibility in managing their 529 plan accounts."

I know our preschoolers are little right now and the thought of them attending college might seem a little far off, but now is actually a great time to think about putting some money aside, whether you use a 529 plan or not. For more information on what is available, check out About.com's site on Saving for College.

Read More:

IRS to Allow Multiple Changes to Section 529 Investment Options in 2009