With stock returns in the red this year, people are generally advised to leave their investments alone until they recover. That can be hard with a 529 college savings plan if you expected to tap the account for a tuition bill due in a few months or weeks.
Many of the accounts are likely to have taken a hit as of late. The S&P 500 entered Wednesday down more than 20 percent from an intraday high set in September, meaning the major index was in bear market territory.
Ideally, savers would have "age-based" 529 accounts, which automatically shift to more conservative investments, such as bonds and certificates of deposit, as the child approaches college, said Mark Kantrowitz, publisher of SavingForCollege.com. Two-thirds of families are invested in such accounts, he said.
So, if your son or daughter's tuition bill is due soon, "the losses are minimal and there is little harm in taking a distribution now," he said.