Call it a hol­i­day gift. Thanks to leg­is­la­tion passed in Decem­ber, begin­ning in 2015, own­ers of 529 accounts will be able to change the invest­ment options on their exist­ing plan con­tri­bu­tions twice per cal­en­dar year instead of just once. This increased flex­i­bil­i­ty is a wel­come option for par­ents and grand­par­ents who use 529 plans to save for their chil­dren’s or grand­chil­dren’s col­lege edu­ca­tion.

Pre­vi­ous­ly, if an account own­er had exhaust­ed his or her once-per-year invest­ment change allowance, the only way to change invest­ment options again on exist­ing con­tri­bu­tions in the same year was to change the ben­e­fi­cia­ry of the account, which may not have been desir­able or fea­si­ble.

Many col­lege savers–and even states that man­age 529 plans–have char­ac­ter­ized the once-per-year rule as too restric­tive and have called for chang­ing it. Con­gress lis­tened once before. Dur­ing the stock mar­ket down­turn that began in 2008, Con­gress passed a rule allow­ing 529 account own­ers to change their invest­ment options on exist­ing con­tri­bu­tions twice per year, but only for 2009. The once-per-year rule kicked back in for 2010.

Although a jump from one invest­ment change to two isn’t earth-shat­ter­ing (some would argue it’s not near­ly enough), it still offers a bit more flex­i­bil­i­ty for 529 plan savers who want to make an addi­tion­al invest­ment change dur­ing the same cal­en­dar year.

Note:
Investors should con­sid­er the invest­ment objec­tives, risks, charges, and expens­es asso­ci­at­ed with 529 plans before invest­ing. More infor­ma­tion about spe­cif­ic 529 plans is avail­able in each issuer’s offi­cial state­ment, which should be read care­ful­ly before invest­ing. Also, before invest­ing, con­sid­er whether your state offers a 529 plan that pro­vides res­i­dents with favor­able state tax ben­e­fits. As with oth­er invest­ments, there are gen­er­al­ly fees and expens­es asso­ci­at­ed with par­tic­i­pa­tion in a 529 sav­ings plan. There is also the risk that the invest­ments may lose mon­ey or not per­form well enough to cov­er col­lege costs as antic­i­pat­ed.