Education

Section 529 plans are an effective way to help your child or grandchild save for college.  Contributions to a 529 account grow tax deferred, and withdrawals are tax free if the money is used towards the beneficiary’s qualified education expenses. Most plans offer a wide variety of investment options, ranging from conservative to aggressive growth.  You can even select age-based portfolios that automatically adjust to more conservative holdings as your child approaches college age.

What many people don’t know is that there are actually two types of 529 plans: (1) advisor-sold plans, which require you to use a designated financial advisor to open the account; and (2) direct-sold plans, which are offered directly to you. As Morningstar notes, advisor-sold plans “are typically more expensive than their direct-sold counterparts, and expenses eat into investment returns.  In addition to higher fees, these plans often hold more in actively managed investments, which have had a difficult time keeping up with passively managed investments in recent years.”  The downside to direct-sold plans is that clients often feel unqualified to select between the many 529 plans and investment options available.

We believe our clients should get the best of both worlds -- a low cost direct-sold plan combined with sound investment advice regarding college savings plans. As an Uptown Capital client, we will help you set up a direct-sold 529 account and choose an appropriate investment option for no additional fee.  And we will continue to monitor your 529 account to make sure it remains consistent with your overall financial goals.     

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