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At Milestone, our settlement planning experts often assist clients with establishing college savings plans. For example, parents who receive a wrongful death settlement involving the loss of their spouse sometimes take a portion of the recovery and put it aside for their child’s higher education. A 529 plan is one useful method for simple and effective savings growth.

A 529 plan is operated by a state or an educational institution. It provides tax advantages and sometimes incentives that make it easier for a beneficiary to save.

Based on findings from U.S. News & World Report, this graphic shows the staggering costs of some universities and colleges. Saving early is critical.
Based on findings from U.S. News & World Report, this graphic shows the high costs of some universities and colleges. Coming up with an appropriate plan and starting early are critical steps to saving enough money to cover costs.

 

There are two basic types of 592 plans: prepaid tuition plans and savings plans. While specifications differ from state to state, the monies invested (including the interest and/or growth) are available for qualified education expenses on a tax-free basis across the board.

Benefits of a 529 plan include:

  • A tax break
  • Control for the donor of the funds in the plan
  • Low maintenance and expenses
  • Flexibility of investments and contributions

Each year, Morningstar rates the available 529 plans across the nation based on five key pillars: Process, People, Parent, Price, and Performance. In 2017, Morningstar identified 34 best-in-class plans that follow industry best practices, which include some or all of the following features:

  • Strong set of underlying investments,
  • Solid manager selection process,
  • Well-researched asset-allocation approach,
  • Appropriate set of investment options to meet investor needs,
  • Low fees, and
  • Strong oversight from the state and program manager.

Gold-rated plans have all or a vast majority of these features. The 2017 gold-rated plans are represented in the graphic below.

A 529 plan is a great consideration for families who are preparing for the expenses of a child’s higher education. Feel free to contact Milestone Consulting to discuss how you can make sure your settlement accomplishes this important life goal.

 

 

About John Bair

John Bair has guided thousands of plaintiffs through the settlement process as co-founder of Milestone Consulting, LLC, a broad-based settlement planning and management firm. Milestone’s approach is comprehensive and future-focused. John’s team has guided thousands of clients by taking the time to understand the complexities of each case. They assess the best outcome and find the path that enables each client to manage their many needs. Read more about Milestone Consulting at http://milestoneseventh.com.

 

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