Introduction
With the cost of college on the rise, more families are turning to 529 college savings plans to invest in their children’s education. One of the top providers in this space is Fidelity Investments, a well-known financial services company offering a range of 529 plans designed to make saving for education both simple and strategic. Whether you’re a parent, grandparent, or even saving for your own future education, Fidelity’s 529 investment options give you the flexibility and tools to reach your goals.
What Is a 529 Plan?
A 529 plan is a tax-advantaged savings account specifically designed to help families save for education expenses. Contributions grow tax-deferred, and withdrawals used for qualified education expenses—like tuition, fees, books, and even some room and board—are completely federal tax-free.
Fidelity offers a variety of 529 plans, including state-sponsored options like:
- The UNIQUE College Investing Plan (New Hampshire)
- The Massachusetts U.Fund College Investing Plan
You don’t have to live in these states to open an account, and anyone can contribute.
Fidelity 529 Investment Options
Fidelity offers a wide range of investment options, catering to different risk tolerances, timelines, and preferences. Here’s a breakdown:
1. Age-Based Portfolios (Target Enrollment Portfolios)
These are the most popular 529 options, especially for parents starting to save when their child is young. They automatically adjust the investment mix over time.
- How it works: When the child is young, the portfolio is more aggressive (more stocks). As the child nears college age, the portfolio shifts to more conservative investments (bonds and money market funds).
- Benefit: Set-it-and-forget-it. Great for hands-off investors.
2. Static Allocation Portfolios
These portfolios maintain a fixed mix of stocks, bonds, and other assets.
- Options include:
- Aggressive Growth Portfolio
- Moderate Growth Portfolio
- Conservative Portfolio
- Benefit: You choose a strategy and stick with it. Good for investors who want a specific level of risk and control.
3. Individual Fund Portfolios
If you want more control, you can build your own portfolio using a variety of Fidelity-managed mutual funds.
- Choose from:
- US Equity Funds
- International Funds
- Bond Funds
- Money Market Funds
- Benefit: Ideal for experienced investors who want to customize their strategy.
4. Fidelity Blend Portfolios
These are hybrid portfolios that include a mix of Fidelity index and actively managed funds.
- Offers a balance between cost and potential performance.
- Available in various risk levels.
Why Choose Fidelity for Your 529?
- No minimum to open an account
- Low fees and transparent expense ratios
- Wide investment selection to fit different goals and risk profiles
- Tax benefits, including potential state tax deductions (depending on your state)
- Automatic investment options to make saving easier
- Mobile and online tools for easy account management
Additional Features
- Gift contributions: Friends and family can contribute directly through Fidelity’s gifting platform.
- Qualified withdrawals: Funds can be used for K–12 tuition (up to $10,000/year) and student loan repayment (up to $10,000 lifetime).
- Transferable: If the original beneficiary doesn’t use the funds, you can transfer the account to another eligible family member.
Conclusion
Saving for education can feel overwhelming, but Fidelity’s 529 plans make it easier with flexible, low-cost investment options tailored to your timeline and comfort level. Whether you prefer a hands-off age-based approach or want to handpick your funds, Fidelity gives you the tools to help maximize your education savings.
Start early, invest consistently, and let compound growth work in your favor. With a Fidelity 529 plan, you’re not just investing in the market—you’re investing in a future of possibilities.
