One of the appeals of my529’s Target Enrollment Date (TED) investment option is how an account owner can select a certain portfolio, invest regularly and then, essentially, let the option do its thing.
This summer, the TED option will see a new portfolio as part of its regularly scheduled asset allocation update. Read on for a refresher on the TED option and an explanation of what will happen and when.
How TED works
my529’s TED investment option can provide ease and efficiency in investing. The option offers 12 portfolios on a single glide path, with asset allocations that range from aggressive to conservative, and are titled according to the beneficiary’s estimated date of enrollment. Account owners can choose a TED portfolio that aligns with their beneficiary’s estimated date of enrollment, or they can make a selection based on their risk preference. The allocations adjust quarterly in a planned shift over time toward conservative holdings.
Updates are part of the plan
By design, every two years the option will offer a new aggressive allocation and, at the other end of the glide path, the portfolio with the most recent date (e.g., 2020/2021) will be folded in to the Enrolled portfolio. This sort of movement between portfolios does not constitute an investment option change. Put simply, the investment option is doing what it is supposed to do—move a beneficiary along a predetermined asset allocation path toward a specific date while investments automatically adjust and rebalance along the way.
Here’s what you can expect
The changes detailed below are automatic. No action on your part is required.
July 3: As is customary on the first business day of the quarter, my529 will make asset allocation adjustments to the TED portfolios where necessary. The quarterly change to the 2020/2021 portfolio will result in the asset allocation mirroring the Enrolled portfolio.
July 10: The 2020/2021 portfolio will be transitioned automatically into Enrolled. my529 will inform account owners about the timing of this transaction closer to the date. Account owners will see the transition in their online accounts and quarterly statements. The transition will not count as an option change.
July 10: my529 will offer a 2042/2043 portfolio, the first new portfolio since the option was introduced in 2021. This portfolio will now be at the top of the glide path and will have an aggressive, stock-based construction.
Be advised: The transition to Enrolled from 2020/2021 will not count as an investment option change. Should you wish to adjust your portfolio before July 3 or after the shift to Enrolled, you may elect to make an option change.
my529 account owners do not own shares of any underlying investment. Instead, they own my529 units in the selected investment options issued by my529.
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