Listen to an audio recording of how we helped someone plan for education funding.
“Everyone deals with financing college differently. Some people don’t want to think about it, others want to know every detail. The important thing is to have the conversation, whether you’ve had your first child or gotten your first tuition bill. We talk clients through various scenarios, until they find the solution that’s right for them, their families and their financial situation.”
Whether children are eight months or eighteen years old, SVA Plumb Financial always encourages parents to plan for education costs. For one client who wanted to maximize his children’s college savings, SVA Plumb Financial came up with a custom solution.
It’s never too late to plan for college, but one client wanted to begin saving as much as possible, as soon as possible. After the birth of his second child, he worked with SVA Plumb Financial to design a proactive plan to maximize his savings.
SVA Plumb Financial uses a unique formula and conservative approach to financial planning for college so parents don’t get a shock when college bills come due, nor do they find themselves with an excess of funds that are taxable or difficult to use.
Advisors discussed with the client what percentage of college he wanted to pay for, and whether he thought his children would go to a public or private university. The client wanted to plan for the maximum—paying 100% at a four-year private school. SVA Plumb Financial advisors estimated that for two children, the client would have to amass about a million dollars by the time his children were ready to enroll.
They put together an aggressive plan leveraging Edvest, Wisconsin’s 529 college savings plan. Although anyone can put as much money into an Edvest account as they want, the program offers a Wisconsin state tax deduction for only the first $3,100 invested per year. To bump up the amount saved per child, SVA Plumb Financial advised the client to open Edvest accounts not only for his children, but for himself and his wife as well. Although the couple wasn’t planning on furthering their education, it’s a simple matter to transfer 529 funds between accounts with different beneficiaries. With this structure, the family was able to maximize their savings as well as claim a state tax deduction for $12,400 per year.
During the planning process, the client had several questions, such as what if the savings accounts grew too large, or what if their children don’t go to college? SVA Plumb Financial works with many families dealing with these issues, and knows the ins and outs of Edvest. Advisors regularly help families scale back as college gets closer. On the other hand, they also help families utilize unused Edvest funds while minimizing potential tax penalties.