May 29 is '529 Day,' yet Edward Jones survey reveals that Nearly Two-Thirds of Americans Don't Know What They Are

ST. LOUIS, May 24, 2012 /PRNewswire/ -- May 29 is 529 Day and according to a survey released by financial services firm Edward Jones, 62 percent of Americans have no idea what a 529 college saving plan means. The survey, which asked respondents to identify what a 529 plan is from a list of options spanning from "a college savings plan" to "a form of life insurance," found that almost two-thirds chose the wrong answer.  About 14 percent of the respondents simply said they did not know.

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The survey of 1,006 respondents, conducted by Opinion Research Corporation, reinforces the growing problem that many Americans are facing today – the rising costs of higher education. Tuition costs of four-year public colleges rose eight percent from 2010 to 2011, and they are expected to continue to rise, according to the College Board. Created more than 15 years ago in 1996, a 529 plan is a tax-advantaged savings plan designed to encourage preparing for future college costs.

"With the cost of college education rising annually, early investing through tools like 529 plans are really a great option for parents and family members who want to help offset the costs for their students," said Greg Dosmann, principal at Edward Jones. "States offer a variety of state-sponsored funds and it can be confusing for parents to choose the right option. Taking the time to talk to a financial advisor can help families identify the right options and get their future education costs on track."

The Wealth Effect

Awareness for 529 plans rises with the wealth level of those surveyed. Only 27 percent of respondents making less than $35,000 a year identified a 529 plan, while 57 percent of those making between $75,000 and $100,000 annually and 62 percent of respondents making more than $100,000 annually identified the correct answer.

Education Cycle

Respondents who have college degrees were much more likely than other respondents to identify a 529 plan, with 53 percent choosing the correct option. This compares to 33 percent of respondents who attended, but did not complete, college and 29 percent of those whose education ended with high school or earlier.

Household Size

Just about half (48 percent) of respondents with children of any age indicated they knew about a 529 plan.  Those with children between the ages of 13 and 17 were less likely (43 percent) than their peers with younger children to identify a 529 plan. More than half of respondents with children under the age of 13 (52 percent) correctly identified a 529 plan. Those with no children were much less likely to choose the correct option (30 percent).

Regional Awareness

There was a slight difference in 529 plan awareness across the country. Respondents based in the Northeast had the highest levels of awareness (45 percent), with respondents in the Midwest following at 40 percent. Respondents in the West and South had the lowest levels of awareness (33 percent and 35 percent, respectively).

In honor of 529 plans, Edward Jones branches across the country are recognizing May 29 as Save for Education Day, a firm-wide holiday derived from the name of the popular college saving tool. To remind communities about the importance of setting education savings goals, financial advisors will be hosting a "529 Day" at their respective branches and dressing in attire from their favorite colleges or alma maters. Families are encouraged to stop by their local branches to learn more about planning for their children's educational future. 

About Edward Jones

Edward Jones provides financial services for individual investors in the United States and, through its affiliate, in Canada. Every aspect of the firm's business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm's 12,000-plus financial advisors work directly with nearly 7 million clients to understand their personal goals - from college savings to retirement - and create long-term investment solutions that emphasize a well-balanced portfolio and a buy-and-hold strategy. Edward Jones embraces the importance of building long-term, face-to-face relationships with clients, helping them to understand and make sense of the investment solutions available today.

Edward Jones, which ranked No. 5 on FORTUNE magazine's "100 Best Companies to Work For 2012," is headquartered in St. Louis. The Edward Jones Web site is located at www.edwardjones.com, and its recruiting Web site is www.careers.edwardjones.com. Member SIPC.

* Survey was based on 1,006 telephone interviews of U.S. adults conducted between the dates of April 26-29, 2012. The margin of error was +/-3%. 

SOURCE Edward Jones