Author: Rachel Biar, Assistant State Treasurer
For those who want to take control of their child’s college savings, look no further than the NEST 529 Direct Plan. Our plan was designed to be as hands-on as you’d like when it comes to managing investments, with options to fit your risk tolerance, time frame and goals. Plus, it provides you with the flexibility to change your option twice per year if necessary. Whether you’re new to NEST 529 or ready to review your current account, here is a breakdown of the various investment options we offer:
Age-Based Investment Options leave the selection of underlying funds and the mix among asset classes to the experts. Choosing this option places your account in a portfolio based on your child’s age. Each portfolio has a different mix of allocations to underlying funds, becoming increasingly more conservative as the child approaches college age.
- Aggressive: provides capital appreciation based on the understanding that the volatility associated with equity markets has the highest potential for long-term capital appreciation. As the child ages, the portfolio moves to seek income.
- Growth: provides capital appreciation and some current income, based on accepting the risks associated with stocks and their potential for high returns. It seeks to balance the effects of volatility through diversification in fixed-income securities.
- Index: provides a balance of capital appreciation and current income through the use of index-based investments. This entails accepting stock risks and their potential for high returns, seeking to balance the effects of volatility through diversification in fixed-income securities.
- Conservative: provides current income and some capital appreciation, based on accepting stock risks and their potential for high returns. It seeks to balance the effects of volatility through diversification in fixed-income securities.
Static Investment Options offer a fixed allocation throughout your account’s life. Unlike Age-Based Options, Static Options do not shift to a different allocation mix as your child nears college age.
- Growth: provides growth of capital and some current income.
- Balanced Index: provides a balance of growth of capital and current income.
- Conservative: provides current income and some growth of capital.
Individual Investment Options allow you to build a custom savings portfolio, offering 16 choices from respected investment companies including Vanguard and Goldman Sachs, as well as an FDIC-insured savings account option from First National Bank of Omaha. With the most hands-on power, this option allows you to add investments to your savings portfolio, creating one that is conservative or aggressive—or you can add one or more Individual Investment Option to an Age-Based or Static Investment Option.