Editor's Picks

– 529 Essentials: 529s vs. Insurance Products
– Article Round-Up
– Data & Research: Survey Stats on the Go
– 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

529 Essentials: 529s vs. Insurance Products

What are the key product feature differences between 529 plans and insurance products for college financial planning?

This week, we will compare and contrast 529s and insurance products for college financial planning.

Two Basic Types of Investment Vehicles Designed for Protection: 529s and Insurance Products. While insurance products are known for protection against something happening such as life insurance in case of death, 529 college plans can also be positioned as protection against tuition inflation. For example, the greater the future cost of higher education, the more important 529s are in helping families with college affordability. Additionally, 529s and insurance products allow families to save money for education with tax exempt asset growth. This week, we discuss those types of insurance products that provide a cash value so that the assets can be used to pay for higher education. One example of this would be whole life insurance, where the purchaser owns the insurance and builds up equity in the policy (called the cash value) as premium payments are made, and a portion of the cash value can be accessed at a later point in time in the form of a tax-free withdrawal and/or loan. For simplicity, this article will stay centered on using the vehicles to pay for higher education, as opposed to the merits of using insurance products with a cash value as an emergency fund, as a cash accumulation vehicle for non-education related goals or for its traditional purpose of life insurance. That being said, the next section on market sizing notes the high volume of assets earmarked in insurance products with a cash value for college financial planning, given the value of liquidity and flexibility in the current volatile marketplace and overall economy. Therefore you as an advisor can provide value by knowing these differences in investment vehicles, selecting the right investment vehicles based on the unique needs of your clients, and knowing how to customize the use of different vehicles to achieve the unique financial goals and needs of your client.

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Article Round-Up

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

– Tushingham Wealth Strategies by Brett Tushingham, CFP, “FAFSA vs. CSS forms: What they measure, what to expect.” Editor’s Take: Informative 1-pager on breakdown between two key financial aid formulas.
– Huffington Post by Holly Kylen, financial advisor, “How to save for your kid’s college while planning for retirement.” Editor’s Take: Advisor’s perspective on balancing the trade-off.
– TurboTax by Ginita Wall, CPA, CFP, “Back to school series: It’s time to use your 529 savings. Now what?” Editor’s Take: Just like the goals of retirement accumulation and retirement income, having a 529 accumulation and payment strategy is a critical step in financial planning.
CNBC, “One college bets big on 529 college savings.” Editor’s Take: Colleges providing incentives for families to save and to save efficiently with a 529 plan will broaden awareness and understanding of 529s, and increase the importance of college financial planning. Also, thank you for sourcing Strategic Insight in the article.
– Lake County News by Dennis Fordham, Attorney, “Estate planning: Protecting college savings from creditors.” Editor’s Take: A California estate planner’s perspective on 529s, trusts and creditor protection.
PLANADVISER, “Higher education institutions have embraced DC”

Data & Research: Survey Stats on the Go

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

$160 billion in student loan payments were made last year by students to lenders, which is expected to negatively impact projected new car sales going forward.
34% of Americans report debt prevents them for saving.
19% of Americans report student loan debt is the most important debt to pay off.

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.

– The 529 Conference 2016 App has been released. Download today.

ABLE Act Column

This section will cover this week’s top legislative updates, product developments, news and resources relating to ABLE Accounts, which are tax-advantaged savings accounts for individuals with disabilities and their families. After-tax contributions grow tax deferred, and distributions from the accounts are tax exempt when used for qualified expenses. For training on the product’s fundamentals and an update on the product’s trends, register for the upcoming ABLE Afternoon Summit on September 14, 2016.

– Palisades Hudson Financial Group by Paul Jacobs, CFP, EA, “States roll out ABLE plans”
– MEFA has launched a website for its Massachusetts ABLE Account Program that is currently under development, and a sign-up page has been launched for those that would like program updates by email.
– Richard Donovan, CEO of The Return on Disability Group, to present “Translate Different into Value – Return on Disability” at the ABLE Afternoon Summit.
– The ABLE Afternoon Summit updated the session title for the “ABLE Strategy: Challenges and Opportunities” panel, and added its session description.
Mark Chapleau, Esq., Member, Weston Patrick, P.A. has been added as a panelist to the “ABLE Strategy: Challenges and Opportunities” panel.

September 6th, 2016
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