For families seeking a hands-off approach to college savings, age-based 529 plan portfolios seem like a perfect fit. Just throw cash in and watch it grow as your portfolio automatically shifts from aggressive to conservative investments as your child gets older.

What most investors don’t know is age-based portfolios vary tremendously in how plan managers allot your contributions.

Age-based portfolios are 529 asset allocation packages that plan holders can choose. Each 529 plan offers several portfolios based on risk tolerance and how fast assets move from aggressive to conservative investments.

Here’s how to make sure your age-based 529 college savings plan is changing with your needs.

Analyze your risk

The first step to figuring out what you need from an age-based portfolio is simply realizing that 529 plans usually offer multiple, age-based options that vary, depending on risk. In New York’s 529 College Savings Program Direct Plan, investors have three age-based options. The most moderate equally splits investments between stocks and bonds when the child is a newborn through age 5. The most aggressive invests 100 percent in stocks. Some age-based 529 plan portfolios offer additional investment options such as foreign stocks and securities.

“If you’re asking which age-based portfolio to go in, that’s a conversation you have with a client to determine what their risk (tolerance) is,” says Scott D. Edelman, president of Edelman Wealth Management Group Inc. in Yardley, Pa. “(Advisers) shouldn’t make generalistic recommendations about those types of portfolios.”

Edelman suggests that families choose their age-based portfolio after examining each type of portfolio option in a 529 plan, concentrating on how quickly it shifts assets to conservative investments as the child ages.

While there are several questionnaires designed to help you figure out your tolerance (Ohio’s CollegeAdvantage 529 plan publishes this one), families can discuss their risk concerns with an adviser or accountant. If their risk tolerance doesn’t align with their portfolio’s asset allocation, account holders can switch 529 plan options once per year, according to the Internal Revenue Service.

Timing is everything

Each plan shifts investments according to its own time line.

“There are two basic types of age-based portfolios,” says Steve Jobe, director of 529 programs for global investment firm BlackRock in New York City. “They look and feel very alike on the surface, but the year-of-enrollment approach tends to have a much smoother glide path.”

Age-based portfolios automatically shift a portion of assets from aggressive to conservative funds on a predetermined date as the beneficiary ages, regardless of what makes sense in the current market, Jobe says.

Year-of-enrollment portfolios generally make asset shifts quarterly rather than once every three to five years like standard age-based 529 portfolios.

“If the market has been growing, but that quarter you’re down and you’re taking your equity down from 90 percent to 70 percent, you could be locking in significant losses,” Jobe says. If you’re in a year-of-enrollment portfolio that shifts assets more gradually, you’re not as likely to be subject to that dramatic a change.

Asset shifts vary from plan to plan. For example, the Bright Directions adviser-sold plan within Illinois’s 529 program doesn’t start to shift assets until the beneficiary turns 8 years old. Meanwhile, Alaska’s enrollment-based plan shifts funds every three years. To make sure your investments will shift over a time frame you prefer, learn the timing of asset shifts and keep an eye on the market to ensure the timing makes sense.

Avoid autopilot

Age-based portfolios are designed for investor ease, but plan holders still should monitor the investments in their 529 plans.

“(Parents) should have a realistic goal of how much needs to be in that account,” says Michael Cecere, a CPA and partner in Gray, Gray & Gray LLP, an accounting firm in Westwood, Mass. If it doesn’t reach that amount by a set time, they should shift it to another type of asset.

The best way to come up with a realistic goal is to carefully evaluate the past performance of a 529 plan before signing on, Cecere says. Once parents already are enrolled, they should periodically check their portfolio to make sure their investments are meeting goals.

“Work with a financial adviser if you don’t have time to keep on top of it,” Cecere says. “After you’ve done the research and put yourself in the best possible position, that’s all you can really do. What happens after that is out of your hands.”