BOSTON, Dec. 3, 2014 /PRNewswire/ -- According to new research on American investors, 70 percent of investors with children or grandchildren plan to contribute to their college education, and 62 percent have started saving. However, the survey also showed only 24 percent of investors own a 529 college savings plan, though 55 percent believe it is a good time to invest in one.
Questions regarding college saving were included as part of the John Hancock Investor Sentiment Index®, a quarterly measure of investors' views on a range of investment choices, life goals and economic outlook. The Index surveys Americans who participate to some extent in their household's financial decision-making process, and have a household income of at least $75,000 and assets of $100,000.
"We are encouraged by the high degree of interest in funding college education among investors, and the degree to which they're already saving," said John Bryson, head of Product Management and College Savings, John Hancock Investments. "Of course, since only a quarter have a 529 plan, it is an excellent opportunity for our advisors to help clients understand the benefits of 529 plans as great options for saving for college."
Many plan to contribute, some substantially
According to the survey, while the large majority of investors with children or grandchildren (70%) plan to contribute to the cost of their college education, just over one-third of those investors (34%) expect to contribute half or more of the cost of college, and twenty percent of them plan to pay more than three-quarters of the cost.
Parents and grandparents mostly begin saving for college when the child is born
Roughly six in ten investors with children or grandchildren (62%) have begun saving for their child's or grandchild's college education. Those most likely to have started saving are respondents 45 or younger, 84 percent, followed by 62 percent of 45-62 year olds and 41 percent of those 65 and older.
Of those respondents who have started saving, 65 percent began when the child/grandchild was born, 22 percent started when the child/grandchild was elementary school aged and 3 percent when the child/grandchild was high school aged.
Some investors wished they started earlier; nearly four in ten haven't started yet
Of those investors who had already started saving for a child's or grandchild's college education, one in four (25%) said they wished they had started earlier. Nearly 40 percent (38%) of investors with a child or grandchild have not started saving yet. The groups most likely not to have started include respondents aged 65 or older (59%) and those who are retired (59%).
"Families start saving for college at different times," said Bryson. "We encourage people to start early, but it depends on many factors, and no matter when they're thinking of starting, there are questions. We are taking a deeper look at the different stages and the questions we've heard and are developing an educational series to help advisors work with their clients on them," he added. In the meantime, John Hancock has touched the surface of the issues in a recent article in its college savings magazine, Admission.
John Hancock's manager of managers approach provides consumers with a choice of 22 investment options and access to more than 20 leading fund managers, offering a diversification1 of asset class, investment styles and fund managers all in one plan. According to savingforcollege.com's plan composite rankings of advisor-sold plans, John Hancock Freedom 529 ranked 3rd among twelve plans for the ten year period ending September 30, 2014, including and not including sales charges.2
1 Diversification does not guarantee investment returns and does not eliminate risk of loss.
2 Rankings are as of 9/30/2014 and are based on total return of Class A shares and, for the rankings including sales charges, reflect the maximum sales charge for each advisor sold 529 college savings plan. Savingforcollege.com advisor-sold composite rankings are derived using the plans' relevant portfolio performance in seven asset allocation categories: 100% equity, 80% equity, 60% equity, 40% equity, 20% equity, 100% fixed, and 100% short term. Rankings are determined by averaging the percentile ranking in the seven categories. Past performance is no guarantee of future results.
About the John Hancock Investor Sentiment Survey
John Hancock's Investor Sentiment Survey is a quarterly poll of affluent investors. The survey measures investors' feelings about the current economic climate and their evaluations of what represents a good or bad investment given the current environment. The poll also asks consumers about their confidence in reaching key financial goals and their attitudes toward specific financial products and services. This online survey was conducted by independent research firm Greenwald & Associates. A total of 1,203 investors were surveyed from August 11th to August 22nd, 2014. To qualify, respondents were required to participate at least to some extent in their household's financial decision-making process, have a household income of at least $75,000, and assets of $100,000 or more. The data were weighted by age and education to reflect the population of Americans matching the survey's qualification requirements. In a similarly-sized random sample survey, the margin of error would be plus or minus 2.88 percentage points at the 95 percent confidence level. Due to rounding and missing categories, numbers presented may not always total to 100 percent.
John Hancock Freedom 529
If your state or your designated Beneficiary's state offers a 529 plan, you may want to consider what, if any, potential state income-tax or other benefits it offers before investing. State tax or other benefits should be one of many factors to be considered prior to making an investment decision. Please consult with your financial, tax, or other advisor about how these state benefits, if any, may apply to your specific circumstances. You may also contact your state 529 plan or any other 529 college savings plan to learn more about their features. Please contact your financial consultant or call 866-222-7498 to obtain a Plan Disclosure Document or prospectus for any of the underlying funds. The Plan Disclosure Document contains complete details on investment objectives, risks, fees, charges, and expenses, as well as more information about municipal fund securities and the underlying investment companies that should be considered before investing. Please read the Plan Disclosure Document carefully prior to investing.
John Hancock Freedom 529 is a college savings plan offered by the Education Trust of Alaska, managed by T. Rowe Price, and distributed by John Hancock Distributors LLC through other broker/dealers that have a selling agreement with John Hancock Distributors LLC. John Hancock Distributors LLC is a member of FINRA and is listed with the Municipal Securities Rulemaking Board (MSRB). © 2014 John Hancock. All rights reserved.
529 plans are not FDIC insured, may lose value, and are not bank or state guaranteed.
About John Hancock Financial and Manulife
John Hancock Financial is a division of Manulife, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife in Canada and Asia, and primarily as John Hancock in the United States, our group of companies offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife and its subsidiaries were C$663 billion (US$591 billion) as at September 30 2014. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife can be found on the Internet at manulife.com.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, investments, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com
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SOURCE John Hancock College Savings