Editor's Picks

– Value of Storytelling in College Financial Planning
– Article Round-Up
– Research: Survey Stats on the Go
– Last Week’s Most Read Article
– 529 Conference 2016 Update
– ABLE Act Column

529 Dash, Required Reading for Your 529 Education: The goal of the 529 Dash is to address the specific needs and concerns of advisers, accountants and estate planners who sell and service families and institutions in the college financial planning process by providing industry relevant news, product training and best practices. Building upon the product training and trends will be our editorial insight, market data and research. Also, the 529 Dash will provide opportunities for you to learn from and network with your peers based on real life case studies and forums such as the Strategic Insight 529 Dash LinkedIn Group. By reviewing these success stories on college financial planning from your peers of advisers, accountants and estate planners, the barriers to supporting your clients and building your book of business will be reduced.

Please Read, Engage and Share.

Paul Curley, CFA
Editor-in-Chief of 529 Dash
Director of College Savings Research
Twitter: @PaulCurleyBC
LinkedIn: Strategic Insight 529 Dash LinkedIn Group

Value of Storytelling in College Financial Planning

This article highlights how 529s helped children and parents efficiently save and pay for college, and avoid student loan debt. Despite the focus in the media on student loans, the solution for college affordability is efficiently saving and paying for college in terms of tax, financial aid and estate planning. The positive outcome from successful college financial planning for the client is two-fold in that the student avoids or minimizes student loan debt and builds long-term financial strength by minimizing overall debt, by saving for retirement earlier and by buying a home earlier. Therefore while income based repayment (IBR) and student loan consolidation may solve the immediate need of new clients and therefore allow you to add value and grow your book of business, you will be able to keep current clients by helping them save and pay for college without loans as opposed to losing them when the college bills come due. Provide value to your current and target clients today through efficient cash flow management in college financial planning, and watch your client base grow in the short and long term.

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Article Round-Up

Here is what you need to know from stories released this week.

PLANADVISER, “Many parents put children’s education ahead of retirement savings”. Editor’s Take: Features new stats on college savings vs. retirement debate.
– Berdon Blogs by Scott Ditman, CPA/PFS, “T&E Talk: 529 plans a win-win”. Editor’s Take: CPA’s perspective on current and potential 529 landscape.
Julie Ford, CFP, CPA, “Should you be saving for college?” Editor’s Take: Fee-Based RIA perspective on how to position college financial planning with clients.
Financial Advisor Magazine, “Roth IRAs could get excess 529 savings under senate proposal”. Editor’s Take: Highlights key piece of a new 529 bill in motion.
Market Watch, “A college savings plan that could actually help parents”. Editor’s Take: Successful summary of Rep. Jenkin’s Bill, and why each piece matters.
Money, “The real reason employers are helping workers pay for college”. Editor’s Take: Explains how planadvisers should position college financial planning benefits to plansponsors.
ThinkAdvisor, “Excess 529 plan funds: putting them to (tax-preferred) work”. Editor’s Take: Solid primer on functionality of contributions and distributions.

Research: Survey Stats on the Go

Here is what you need to know from data and research released this week.

60% of high school students are saving for college in 2016, compared to 51% in 2015.
37% percent of parents report that their children’s education is more important than their own retirement savings
28% of parents are aware of 529s. Editorial Insight: Advisors are able to help 72% of parents by helping them save, and save in a tax, financial aid and estate planning efficient manner with a 529.

Last Week's Most Read Article

3 Reasons Why Student Loan Debt Tops $1.3 Trillion As of March 2016, the Federal Reserve has reported student loan debt to be $1.3509 trillion, as defined as, “Includes student loans originated under the Federal Family Education Loan Program and the Direct Loan Program; Perkins loans; and private student loans without government guarantees.” As such, the number is defined as only those loans specifically defined as being a student loan. By the strictest definition, yes, that is the amount earmarked specifically for education. But as we all know, loans taken out for the purpose of higher education go way beyond those listed above. Based on Table 31 on page 54 of Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2015“, this figure of $1.35 trillion excludes education debt currently owned for one’s own education that was taken from a home equity loan, credit card or other forms of loans. These three additional sources of loans is by no means a trivial amount as the average home equity loan for education was $57,550, while the average from credit cards was $7,574 and the average from other types of loans was $11,969. Therefore, $1.35 trillion in student loan debt underestimates the total value of loans taken out for the goal of college financial planning. Building upon this perspective, the value of college financial planning in achieving college affordability is even higher than previously disclosed and perceived, and the value that clients will put into you for helping them with this goal is even higher than previously communicated. While they may not fully appreciate your support on college financial planning now, they will appreciate it even more later than previously projected when they get their first tuition bill and are able to pay their planned goal amount. Inversely if you do not help them plan, the pain they will feel will actually be much worse than previously expected based on this data. Have the conversation today with your clients, and create even more value for them than you may have previously perceived.
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529 Conference 2016 Update

The 529 Conference 2016 will take place from September 12-14, 2016 at the JW Marriott Grande Lakes in Orlando. Updates to the agenda will be announced in this section. Register today.

– Brett Tushingham, Managing Member, CCO and CFP®, of Tushingham Wealth Strategies, LLC, to present on “Advisor Perspectives: Top Producers” panel.

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ABLE Act Column

This section will cover this week’s top legislative updates, product developments, news and resources relating to 529A ABLE Accounts. ABLE Accounts are tax-advantaged savings accounts for individuals with disabilities and their families. Income earned by the accounts will not be taxed when used for qualified expenses. For training on the product’s fundamentals and trends, register for the upcoming ABLE Afternoon Summit on September 14, 2016.

Industry Updates:
– On June 13, 2016, Tennessee launched the ABLE program titled, “ABLE TN”. Learn more about the program through its website, and keep up to date on its announcements and developments through its Twitter account.
– Nebraska’s Enable Savings Plan is expected to launch on June 30, 2016.
MSRB announced that they will include ABLE program disclosure statements on its EMMA portal.

Article Round-Up:
ThinkAdvisor, “States Roll Out 529 Plans for Disability Expenses”
Baltimore Sun, “New accounts will help people with disabilities save for the future”
Jackson County Times Journal, “Treasurer Josh Mandel announces launch of STABLE Account multi-media awareness and outreach effort”

As a follow-up to the launch of the ABLE TN program, we contacted the program administrator so that you can become more aware of the program and learn how it can help your clients. The following is part of an interview with Joy Harris, Assistant Treasurer of Financial Empowerment with the Tennessee Treasury Department.

(Paul Curley): “How will the launch of ABLE TN help advisors support their clients?”

Answer (Joy Harris): “ABLE TN will give advisors another excellent tool to help clients plan and save for future expenses associated with disabilities. Benefits of the ABLE TN Program include: diverse investment options, tax-free earnings, and convenient online management. ABLE TN is a nation-wide program with low asset-based fees, and no additional cost to out-of-state participants. Our website, AbleTN,gov has easy-to-access tools to help advisors determine client eligibility and materials for assisting advisors in meeting the financial needs of their clients.”

Editorial Summary: ABLE accounts will provide you with a tool to more efficiently help certain clients build short- and long-term financial strength. Please note the availability of ABLE Accounts, as supporting the applicable client base will strengthen your ties to current and potential clients.

June 27th, 2016
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