Editor's Picks

– 529 Conference 2016: Building Momentum for an Effective Employee Benefit Strategy
– Article Round-Up
– Data & Research: Survey Stats on the Go
– Letters to the Editor
– 529 Conference 2017 Update

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

529 Conference 2016: Building Momentum with Corporate 529s

Based on recent legislation, the corporate 529 channel is poised for growth in the near future for financial advisers, accountants and estate planners. This year, four bills have been introduced that would expand incentives for employers to provide 529s as an employer benefit to employees. First on April 28th, 2016, U.S. Senators Richard Burr and Bob Casey introduced Senate Bill 2869 with a title of, “The Boost Savings for Collee Act” that would create an employer tax deduction on 529 savings plan contributions to employees up to $1,000. Second on May 10th, Representative Bruce Poliquin of Maine introduced House Bill 5186 that would create (if passed) a tax deduction for companies on contributions to employee’s 529 plans. Third on May 11th, Representative Dold of Illinois introduced House Bill 5191 that would create (if passed) a tax deduction for companies on contributions to employee’s 529s plans and student loans. Fourth on May 12th, Representative Lynn Jenkins of Kansas introduced House Bill 5193 titled, “529 and ABLE Account Improvement Act of 2016” that would encourage more employers to provide access to 529s. Building upon the volume of legislation focusing on the corporate 529 channel, the 529 Conference 2016 in Orlando included a session titled, “Corporate 529s: Building Momentum for an Effective Employee Benefit Strategy.” This week’s article will provide market sizing and data on the channel, an overview of the panel discussion and the pros and cons of focusing on this channel as a means to grow and protect your book of business.

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Article Round-Up

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

PLANSONSOR, “Student Loans Putting a Hole in Retirement Savings for Millennials.” Editor’s Take: Efficient college financial planning helps families pay for college, and start saving for retirement sooner.
The Simple Dollar, “Roth IRA vs. 529 plan: Which is best for college savings?” Editor’s Take: Timely article, and read my response here in the article titled, “529 Essentials: 529s vs. IRAs.”
– St. Louis Post-Dispatch, “Can grandma’s 529 plan hurt my kids’ chances for financial aid?” Editor’s Take: Timely topic, and read my response here in the “Financial Aid” section.
Morgan Stanley, “10 Things you Should Know about 529 college savings plans”

Data & Research: Survey Stats on the Go

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

62% of children expect their parents to pay most of whatever college they want to attend, but only 65% of parents say they’ll only be able to contribute some to their college. Editor’s Take: The divide in perspectives shows an important gap in college financial planning, which will allow you to provide value in having the discussion with your clients.
32% of Millennials said they would save more for retirement if their student loans were hypothetically absolved, while 54% would set up an emergency fund and 42% would save to buy a home.

Letters to the Editor

The August 23, 2016 edition of the 529 Dash included the following, “A financial advisor reading the 529 Dash submitted the following question, ‘Would like to see info on how advisors get young families (under 5) to start 529s.”

Letter to the Editor: When each of my kids were born, we put $10,000 away for them as soon as possible.  With an 18 year horizon for college I went under the assumption that at moderately aggressive investing the money would double every 8 years or so.  That multiplies out to about $40,000 when college starts, assuming an 8% average annual return the money quadruples. Now, a family that decides to put away $2,000 per year for 18 years at an assumed interest rate of 8% yields $74,900, with a total cost of $36,000.  The investment about doubles. I like to show this to people and get them excited about quadrupling their money instead of just doubling it.  People really need to see how the “time value of money” works. In an ideal world, you would start with the $10,000 initial investment and then add $2,000 every year as well.  Then, college really should be paid for and maybe grad school too.  That was my personal goal:  $10,000 into a 529 plan and let it ride and putting the max of $2,000 into a Coverdell IRA every year for the kids.  Why this plan?  A 529 is really just one management methodology-you are putting all of your eggs in one basket.  Also, 529’s tend to be more conservative and can be fee heavy.  A Coverdell is completely self-managed and I can be more aggressive to get my desired returns.  I personally have the ability to effectively manage a Coverdell.

Does that help?
Emery J Levick
Director of Investments/Partner
US Asset Management, LLC
503 Martindale Street
D.L. Clark Building
Pittsburgh, PA  15212
(as a note, I started with custodial accounts 16 years ago and moved the money over time to the other investments as taxes, FAFSA and 529’s all evolved)

Editor’s Note: Thank you Emery, and much appreciated. This is a great example of how to explain time value of money, and the value of college financial planning. Please feel free to submit additional Letters to the Editor at pcurley@sionline.com.

529 Conference 2017 Update: Save the Date

The 529 Conference 2017 will take place from September 11-13, 2017 at the JW Marriott Grande Lakes in Orlando. Updates to the agenda will be announced in this section below. In the meantime, please save the date.

October 10th, 2016
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