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529 plans and Gen Xers: College planning for the forgotten generation
Helping clients prepare for future college costs has become an integral part of holistic financial planning. Here are four opportunities to grow your practice by helping Gen X clients plan for college.
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Commentary: North Dakota changes impact 2nd quarter performance rankings
We rank plans that consumers can enroll in directly, as well as those sold through brokers and fee-based financial planners for the second quarter 2017.
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Breaking down the Minnesota 529 state tax benefit
Families in MN are eligible for a tax deduction or credit for their 529 plan contributions. Learn how to choose the right option for your client's college savings strategy.
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FAQ on 529 investment changes
The IRS permits only two investment changes within a beneficiary's 529 account in any calendar year. Here are some answers to frequently-asked questions regarding this limitation.
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5 college planning questions to ask during annual reviews
Make sure your asking these questions in your annual review with your clients regarding their college savings.
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A look at the recent NAST symposium
Every year the National Association of State Treasurers hosts its own 529-focused conference. Here are some of the outcomes - in brief - from that event.
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Trending in 529 plans: Compliance-friendly share classes (2/2)
C to A Convertibles are better than either of their predecessors, despite minor drawbacks. Find out why.
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Commentary: First Quarter 2017 plan performance rankings
We rank plans that consumers can enroll in directly, as well as those sold through brokers and fee-based financial planners) for the first quarter 2017.
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Trending in 529 plans: Compliance-friendly share classes (1/2)
Shares that convert automatically are becoming increasingly popular, but are they really the miracle cure-all 529 providers claim?
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5 things advisors need to know about 529 withdrawals
With some 529 plans over 20 years old, more account owners are taking withdrawals. But there are some important things you need to know before requesting that check.
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Opinion: The generification™ of 529 products
In the arms race for the lowest-cost plan, 529s have fast started to become a commoditized product. Is there room left for innovation?
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How Private College 529 works
Private College 529 is a unique animal in the college savings space, and their strategy reflects their novel position. Here we provide insight into how they approach college savers.
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The anti-529ers revisited: Haters gonna hate
There are some people that are thoroughly convinced 529s are a bad bet. Here we explore why.
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Commentary: Fourth quarter 2016 plan performance rankings
We rank plans that consumers can enroll in directly, as well as those sold through brokers and fee-based financial planners) for the fourth quarter 2016.
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H.R. 529 offers big benefits to college savers
New legislation might make 529 plans more alluring, but will it actually pass?
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What advisors need to know about the CSS profile
Investors are increasingly turning to their financial advisors for help with college planning. Here's what you need to know about the CSS Profile.
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Opinion: Betsy DeVos is a bad bet for education
The appointment of Betsy DeVos as Secretary of Education has raised many eyebrows, and deservedly so.
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Industry chatter: A look ahead at 2017
This was the year of the Fiduciary Rule, roboadvisors, and money markets. What will be the big topics among 529 plans in the year ahead?
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How to calculate your state tax benefit
You can plug the numbers into our State Tax Calculator, but how do we arrive at those numbers? Here we dig into the weeds.
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Are 529 plans REALLY tax-free?
Sometimes, even professionals can be fooled by complex tax code language. In fact, some of it reads like 529s might not actually be tax-free!
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Save it forward: States that allow you to carry benefits into future tax years
There are a few states that allow account owners to make a large contribution and claim their tax benefit in future years.
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The January Question
Can we reimburse ourselves out of our child's 529 plan without be subject to taxes or penalty?
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Does a financial advisor deserve their 529 commission?
One of the most common questions from advisors is, "How can I justify my fee?" But it shouldn't be a question at all.
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What does the future hold for prepaid 529 plans?
Virginia529 prePAID may consider changing its structure to limit new participants to in-state schools. So are prepaid plans still viable?
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Commentary: Third quarter 2016 plan performance rankings
We rank plans that consumers can enroll in directly, as well as those sold through brokers and fee-based financial planners) for the third quarter 2016.
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Exceptions to the withdrawal penalty
Sometimes a non-qualified withdrawal is unavoidable, but there are some situations where your client may be able to avoid the 10% penalty.
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Wealthfront 529 Plan Launches
Robo-advisor Wealthfront launched its first 529 college savings plan at the beginning of November. But how does the Plan stack up? And what does this mean for traditional advisor channels?
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Oops, I withdrew too much 529 money!
There are many situations where an account owner can accidentally withdraw too much money. Here’s what you can do
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Tax parity isn't as important for investors as once thought
Only two states have passed a tax parity law since 2008. So does it still matter?
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A Tale of Two 529 Mistakes
What to do when a client takes a distribution when they didn’t mean to, or forgot to file the 5-year election
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A tax strategy that will surprise you
This article explains a scholarship tax strategy you may not have thought about.
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Omnibus Part III: Omnibus-Light and the Future
Omnibus accounting in the retail space is widely accepted as standard for most asset management products, and will be critical to most large and mid-sized broker-dealers as it is slowly implemented with 529 plans. But what about everyone else?
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Commentary: Second quarter 2016 plan performance rankings
We rank plans that consumers can enroll in directly, as well as those sold through brokers and fee-based financial planners) for the second quarter 2016.
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529 ABLE accounts: Your questions answered
Advice on helping families meet the financial challenges associated with living with a disability, and how to maximize the benefits of 529 ABLE accounts.
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Think twice before sending clients to a direct-sold 529 plan
Financial advisors are increasingly viewed by clients as their guide to achieving their college savings goals. Financial advisors, however, are challenged by the paperwork-intensive, and – sometimes – low asset size of 529 plans. To make their lives easier, some advisors have found it simpler to forego the commissions on the asset base of 529 plans and refer their client to a direct-sold plan. However, this can be outright dangerous for both the advisor and client: Here’s why.
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How to gain financial-aid expertise
Let’s face it. Nearly all of your clients with school-aged children are concerned about college financial-aid eligibility, whether or not they should be. By that I mean many of your clients will never qualify for needs-based financial aid, simply because their income is too high. Yet they may still turn to you, their financial advisor, for guidance. Here's how to quickly gain financial-aid expertise.
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How the kiddie tax may impact your clients
The Kiddie Tax is one of the most overlooked pieces of tax code until it hits your high-net worth client. Prepare them before they are impacted.
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Omnibus Part II: Challenges to implementation
Omnibus accounting is widely accepted as standard operating procedure for most retail asset management products. Yet many 529 Savings plans remain, for the most part, staunch hold-outs: Here's why.
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The magic of beneficiary changes
Changing the beneficiary of a 529 plan in conjunction with an investment change or rollover is very useful in getting around the limitations placed on these types of account changes.
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Commentary: First quarter 2016 plan performance rankings
We rank plans that consumers can enroll in directly, as well as those sold through brokers and fee-based financial planners).
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Money Market Reforms and 529 Plans
Additional rules were released in 2014, and will be enforced later this year.
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Ascensus and Wealthfront Pursuing Roboadvisor Solution in Nevada
Wealthfront has partnered with Ascensus College Savings to pursue a private labeled product.
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Omnibus: What it is and why advisors should care
Omnibus is a word a lot of people in the asset management industry toss around, but not a lot of people understand.
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How the Fiduciary Rule Impacts 529 plans
The U.S. DOL (Department of Labor) unveiled new rules that are, in aggregate, widely-referred to as "The Fiduciary Rule."
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Navigating 529 plans through a rough market
Industry experts share their advice on how to handle clients who have stock market jitters.
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Seven items for your year-end 529 checklist
The fourth quarter of the year is the most important time to review your clients' 529 plans.
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Morningstar awards "Gold" rating to four 529 plans
Morningstar and offer helpful tools that can help you sift through the hundreds of 529 plan options available to help find the most suitable investment for your clients’ needs.
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Top 6 advisor misconceptions about 529 plans
It’s time to clear up the confusion about the most common misconceptions and see how 529 plans can benefit your clients.
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How to make 'Lazy Money' start working to save for college
One idea for advisors looking to deepen client trust and relationship levels is identify so-called 'lazy money' sitting in parent or grandparent accounts, and recommend repositioning those resources to shore up a college savings gap.
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How Obama's new FAFSA rules will change college savings
The president has recently made changes to the FAFSA which could make saving for college easier for some families. Here are four common examples of how assets used to save for college can affect financial aid.
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75% of college savers don't know how to invest their 529 savings
When it comes to selecting investment options, many clients would benefit from the guidance of a financial advisor, read more:
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The best way to withdraw 529 funds
It will soon be time to pay your bill for fall semester expenses! Here is some advice for how much and when to withdraw 529 plan funds, and also some tips on designating the distributee.
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10 rules for superfunding a 529 plan
This article describes how to make a large contributions to a 529 plan under the special 5-year gift-tax election.
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6 ways to help your clients maximize financial aid
How can I make sure that my client get the most financial aid possible?
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Study reveals parents need more help saving for college
How can you as an advisor help your clients achieve the education goals they have for their children? Here are a few things to think about.
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Shortcut to comparing 529 investment option details
All the details are laid out in the official program descriptions, but wading through those details when each 529 plan presents them differently in their materials is a difficult and time-consuming task.
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Alfred E. Neuman's Guide to 529 Plans
You may meet resistance when recommending 529 plans to your clients stemming from certain fears and misconceptions about how these college savings programs work.
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A 529 client you don't want to overlook
Have you been giving millienials enough attention? Here are a few tips on how you can tailor your approach when working with this younger generation and their college savings needs.
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5 ways to ease client concerns about paying for college
If you have clients with children under the age of 18, you need to be thinking about college. Learn more about the recent Gallup poll.
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New research shows why families who aren't saving for college will have to borrow
New research has revealed just how much of an effect saving for college has on reducing the likelihood that a student will incur student debt. So why are Americans continuing to rely so heavily on student loans? Here are three factors that may be to blame.
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You do not have to trade retirement for tuition
Parents will do almost anything to keep their children from having to borrow to pay for college, even if it means sacrificing their own retirement savings.
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Why can't you donate your 529 plan to charity?
Donating a 529 account to charity might seem like the perfect solution for some who have leftover money in their account. Unfortunately, the tax law as it is currently written prevents this.
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10 reasons why president obama's proposal to reduce 529 benefits will NOT be enacted
President Obama's proposal to streamline education tax incentives calls for a rollback of the tax-free qualified withdrawals from 529 education savings plans that were enacted in 2001. Here are ten reasons why it's most likely that this proposal will not be enacted into law.
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529 plans: Underappreciated Benefits Part I
When Congress in 2001 transformed 529 plans from being tax-deferred vehicles into being tax-free vehicles, I'm not sure they contemplated an environment in which investment returns might regularly outpace increases in college costs.
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Avoiding the financial-aid trap with grandparent 529s
Here are several strategies grandparents with 529 plans can utilize in order to contribute to their grandchildren's college fund without negatively impacting their financial aid eligibility.
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Going "all-in" on 529 plans
The IRS permits 529 plans to establish very high contribution limits—currently the highest is $452,210 in Pennsylvania. The reason for such generosity is because Congress in developing Section 529 did not want to prevent families with sufficient financial resources from saving for the FULL cost of postsecondary education, including both undergraduate and graduate school expenses.
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Consider this 529 college-savings niche
Did you know that 501(c)(3) charitable organizations can open accounts in a 529 plan? Not many people do. Yet this possibility presents an intriguing opportunity for both charities and forward-thinking financial advisors.
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A super calculator for 529 superfunding
Explains the 529 Superfunding Calculator—that can help you guide your client in making the most effective use of the 5-year election.
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Yes, you can teach an old dog new tricks
Ideas aimed at the goal of getting your clients to ask you about education savings instead of you having to initiate the discussion.
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Benchmarking the 529 industry
Investors, advisors, and the financial media all want to know how well 529 plans, as a group, are performing. In other words, are 529 plans delivering solid investment returns?
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Will 529s become retirement accounts?
A bill introduced into Congress last week would have families scrambling to open 529 accounts—not necessarily for college.
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Biggest college savings misconceptions
Here are the biggest college savings misconceptions that parents and grandparents have.
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Tax reform and 529 plans
Joe shares his thoughts on the Chairman of the House Ways and Means Committee's recently-proposed comprehensive tax reform package and its effect on tax incentives for education.
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Opportunity exists for more advisor 529 sales recently conducted its first annual College Savings Survey, an online survey of our website visitors designed to investigate families' beliefs, goals, and actions when it comes to saving for college in America.
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Converting UGMA/UTMA to 529 -- good idea or bad?
Your clients set up an UGMA or UTMA account for their child several years ago and have been gifting cash and securities into the account. Should they now convert the account to a 529 plan?
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Resolutions for 2014 for financial planners
I am offering up 6 resolutions for 2014 directed to financial planners. These suggestions will not only help your clients, but most likely will help you attract new clients.
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Test Your 529 Knowledge Part I
Take this three-question test—the first of an occasional series—and find out if you know the ins and outs of 529 plans.
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Did college just get less expensive?
The College Board this week released its annual report "Trends in College Pricing" containing data that suggests college tuition inflation may be slowing. This is good news for your clients concerned about funding future college costs for their children and grandchildren.
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Coming soon to a state near you: tax-free investment accounts for those with disabilities.
The ABLE Act would permit states to establish 529-ABLE programs to accept and invest contributions for individuals with disabilities, and to make federally tax-free distributions when used for a broad category of expenses incurred by an eligible beneficiary.
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UGMA/UTMA conversions to 529: When do they make sense?
Guidelines and examples consider the "kiddie tax" when determining whether to convert an existing UGMA/UTMA custodial account to a 529 plan.
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529s for aunts and uncles
A Pennsylvania financial planner increases tax savings for a client by directing funds to 529 plans for nieces and nephews.
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529s on a roll
Sallie Mae and Ispsos Public Affairs' annual survey "How America Pays for College 2013" revealed encouraging news in regards to 529 plans, including a dramatic increase in 529 plan use over the past year.
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Financial Cool-Aid
In light of the recent student loan interest rate hike, here are some things to know when talking to your clients about how the change will affect them and what they can do to minimize taking on massive debt.
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What's on the 529 horizon?
Joe Hurley offers thoughts on federal legislative developments that may, or may not, impact 529 plans.
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When to undo a 529 plan
Sometimes it pays to undo a 529 plan. Amy Feldman of Reuters wrote an excellent article about the impact of 529s on financial aid and quoted me as suggesting that it’s sometimes better to take a nonqualified distribution: "Most people would never think of that, but depending on the financial aid package, the financial aid penalty may be worse than the tax penalty."
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10 reasons why Obama won't touch your 529
Many investment professionals were surprised last week by the Obama administration’s fiscal 2014 budget proposal to place a cap on balances in tax-advantaged retirement accounts.
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College savings versus retirement savings
Some parents will choose to fund their children's college accounts even when they are not making full use of 401(k) plans and IRAs, and for these parents that decision may be the right one.
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The impact of 529 plans on claiming a dependent
How does taking a distribution from a 529 plan affect a client's ability to claim a child as a dependent? No one really knows the answer to that question, at least not with any certainty. A tax preparer's stance could determine whether the client is able to take advantage of the dependency exemption, the American Opportunity credit, the Lifetime Learning credit, and the tuition and fees deduction.
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A checking account is a checking account
I appreciate a good survey as much as anyone. The results can provide useful insights and uncover trends, either positive or negative. However, there is usually much more to be found in the survey details than the headlines and executive summaries might suggest.
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Education incentives survive fiscal cliff
President Obama has just signed the 2012 American Taxpayer Relief Act (ATRA), saving many of the education tax incentives scheduled to expire on December 31, 2012, and even resuscitating incentives that had expired at the end of 2011.
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Are you worth your commissions?
Are you really worth your commissions? Do you provide enough extra value to your clients to justify the sales load of an advisor-sold 529 plan?
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A College-Savings Enigma (Squared)
23 is the square root of 529. Depending on your predilection to numerology, something known as "the 23 enigma" could be a big deal.
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The anti-529ers
Financial advisers who do not like 529 plans may have their reasons, and I respect their opinions, but I suspect that many of their anti-529 comments come more from a lack of knowledge and experience than from objective data.
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