What’s Your Plan?

Hello there and welcome.  I just got back from an industry conference in sunny San Diego and super excited to share all of my takeaways. While I enjoy what I do for a living (retirement space), I rank conferences up there with afternoon coffee and red velvet cupcakes. Conferences give me the opportunity to network with other industry professionals and listen to kickass keynote speakers who share their plan.

All women need a plan… a financial plan.  It can be as small as save $1,000 or as big as planning for retirement.  I want you to email me and let me know your plan. I am not going to tell you executing your plan will be easy, but that’s where I come in.  I will be your biggest cheerleader and greatest advocate. I have been so blessed in my adult life with amazing mentors and it makes a world of difference.

My latest plan is being super focused on contributing as much as I can to Kate and Avery’s 529 plans.  A 529 Plan is a college savings plan that has favorable tax benefits. A good source is IRS Publication 970, Tax Benefits for Education. Did you know that the 2016 maximum limit for a 529 plan is $14,000 (for each beneficiary)? Sadly, I am not setting aside $28,000 net dollars for college today, but would like to see what I can do to increase my contributions before the girls start college (2022 and 2023 respectively). One speaker suggested grandparents skipping the toys and giving checks instead. It sounds good in theory, but it may be challenging to sway Mimi or Uncle Jack to forfeit a wrapped gift in favor of a 529 plan contribution. Maybe you should share my blog as incentive for buy-in.

Please note I am not a financial advisor, just a mom with a plan of sending her girls to college with resources.  Remember anything greater than zero is something.

Here are the key takeaways from this college savings session:

  1. DO NOT pay for college with RETIREMENT FUNDS. Negative implications include:
    • Years of lost investment earnings and compound interest
    • 10% early distribution penalty if you are younger than 59 ½ years old (exceptions may apply)
    •  Ordinary income tax due on amount withdrawn
    • Distribution treated as student income when applying for financial aid
  1.   Only 529 plans allow five years of tax-free gifts permitted in one year. Gifting $70,000

($14,000 X 5) at birth will grow into a staggering balance of approximately $198,000 at college time.  This example uses an annual investment return of 6% each year.[1]

  1. Experts say more than 4 in 10 families are not saving for college. 61% families are using general savings accounts as their college savings strategy versus 37% in 529 plans[2]. SAVING IS NOT ENOUGH. YOU NEED TO SAVE AND INVEST.

If you have any questions, I would love to hear from you. Be on the lookout for other tips and tricks to help build your nest egg.

Live well & spend wisely.



[1] Annual investment return of 6% is used for illustration purposes only and should not be replied upon to make investment decisions.

[2] Source: Sallie May, How America Saves for College, 2015

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