529 Plans

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Published by Mark Lookabill

529 plans were just recently brought back into headline news with President Obama’s State of the Union Address. During the State of the Union, the President expressed his desire to start taxing withdrawals from 529 plans. To give a little bit of history on 529 plans, back during the Bush era tax cuts were enacted and investors in 529 plans were able take tax-free withdrawals so long as the proceeds were used for qualified education expenses. The recent proposal by President Obama sought to reverse that and many became concerned that the money that they had saved for their kids’ or grandkids’ college expenses was going to lose their biggest benefit (i.e. the tax-free withdrawal).

In my opinion, this would largely eliminate the use of 529 plans because without the tax benefits, the negatives associated with 529 plans (overall expenses and costs associated with the plans as well as the limited transactions or reallocations an owner is allowed to do on annual basis) would lead investors to look to other more favorably taxed investment vehicles. Well, everyone can rest easy. On Tuesday, the White House stated that they are dropping their plan to seek the taxation of 529 plan withdrawals because the proposal had become “such a distraction.” This recent episode provides a good reminder to us all that when looking at savings and investment savings, the taxation of different types of accounts is a portion of the decision. If an investment is made solely or primarily due to tax considerations, you may one day find yourself subject to a different set of rules.

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

4 Hurdles in Retirement Beyond Your Investment Portfolio

Becoming hyper-focused on only one aspect of a problem is pretty much never a good approach. A racecar driver who only focuses on speed and ignores strategy won’t win races, at least not many of them. A carpenter who only hammers in nails won’t build strong structures. 

Your Silicon Valley Bank Questions Answered

You likely have heard about the recent Silicon Valley Bank (SVB) collapse and probably have questions. Here, we provide you with unbiased answers to your questions.

Thinking About Retiring Early? 8 Things to Consider First

Tom Fridrich, JD, CLU, ChFC®, Senior Wealth Planner We’ve all asked ourselves whether it’s too early to retire (usually after a particularly challenging commute or dealing with a difficult client).  You may have even gone so far as to take a sneak peek at your account statements …

4 Tips to Take Your 401(k) to the Next Level

Matt Kory, Vice President, Retirement Programs As a retirement income vehicle, the 401(k) is second in popularity only to Social Security – and as CNBC reported in 2019 the number of 401(k) millionaires is at an all-time high. But is a million dollars even enough for your retirement needs? 

1 2 3 85 86 87

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation