A 529 plan is an investment, meaning it comes with risk. A plan's investment options include mutual funds, which are not guaranteed to increase in value. Depending on market fluctuations can lose value. That's why it's important to pick an investment fund with a risk level you can tolerate. Some funds are more aggressive than others, and your risk tolerance can change as your child gets closer to withdrawing the money. Some plans include age-based accounts, which adjust the risk depending on the date the funds will be needed.