Ep. 23 – WA529 Plans. The Best Decision You’ll Ever Make
529 plans in Washington State had a year full of growth and change. Today we talk to Luke Minor, new Program Director of the Washington College Savings Plans (which is both the original Guaranteed Education Tuition program, GET for short and DreamAhead
College Investment Plan. We are also joined by Jackie Ferrado who as Community Relations Manager, travels around Washington to communities large and small, to educate people on the benefits of using a 529 plan to help save for their child’s higher education.
529 Day is coming up on May 29th. In spite of our nation’s student loan crisis and the recent attention on the college admissions scandals, people still don’t know much about 529 plans which are designed for college savings.
We had a little fun playing Debunk the 529 Myth game. I must say, Luke and Jackie know their stuff.
Depending on what study you read or trust, the majority of Americans don’t know what a 529 plan is and do not plan to use it to save for college. That is unfortunate. When I plan with families, we use a multipronged approach to saving and paying for college with the 529 plan at the core. We add in taxable accounts, Roth IRA accounts for both parent and student, grandparent gifting strategies, cash flow, tax scholarships and more in fully rounding out our plan to pay for all 4 years. Why do we spend so much time in looking at this from every angle? Because at this time, there is approximately $1.6 trillion in student loan debt, with the fastest growing segment attributed to those over 60!! Who wants to be paying down student debt when you are wanting to retire?
At the end of 2018, there were 13.8 million 529 plan accounts with $311.1 billion in assets. (https://www.ici.org/research/stats/529s/529s_18_q4)
In this episode you’ll learn more about:
- What are 529 plans and how do they work.
- The differences between the two types of plans, prepaid and investment.
- The strength of the GET guarantee.
- Updates on the transition that took place last year. GET holders had 3 options, stay in the GET plan, rollover to the new DreamAhead plan at incentive payout rate, or get a refund and how did all that play out.
- The actual numbers of those that rolled over or stayed and what kind of additional units did those who stayed receive.
- We talk about current proposals to 529 plan rules that might allow more flexibility such as using those funds to pay off student loans
- The best part, 529 myth busters!
Tune in to hear all the details.
- WA529 Washington College Savings Plans
- College Savings Plan Network
- Article by Luke Minor, And Now For Something Completely Different? and the confusion around the terms.
- Joe Messinger of Capstone Wealth Partners Blog on 529 myths
- Past video discussing the changes to the GET and new DreamAhead
- Ready Set Grad
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Angie founded Avea Financial Planning and is a fee-only advisor helping people retiring in 1-2 years, particularly PNNL employees, with tax-smart retirement planning, investments & fiduciary financial advice so they can be more confident and live life on their own terms.