Be their primary resource for information, ideas, and guidance about the importance of saving for college.
Help clients establish a plan that works for them and that they’ll stick to along the child’s journey to college.
Periodically review investment options and their financial situations to ensure that the plan still makes sense.
December is giving season. Chocolate and charcuterie are nice client gifts, but helping clients maximize the gift of a college education for a child is a long-lasting one. (Of course, you can do both.) Here are three college savings “gifts” you can give to your clients.
1. Teach them about saving for college
Help them understand the potential costs of a college education. For instance, how college tuition has been rising every year. Also, remind them that loans increase the cost of college, so the more they save, the less the student will need to borrow. Even saving a little is better than not saving at all. For instance, a $200 monthly contribution to a 529 plan can grow to more than $41,400 after 18 years.1 This also underscores signing up for automatic contributions, which ensure that they save regularly, plus take advantage of compounding and dollar cost averaging.
2. Ensure they’re comfortable with the plan
Some clients might be concerned that saving for college impacts financial aid. The federal aid formula assesses parental assets, such as a 529 plan, at a maximum rate of 5.64%.2 An easy way for a client to think about it — for every $1,000 in a 529 plan, the expected family contribution (EFC) toward college costs could increase by only $56. For grandparents and anyone else who owns a 529 plan for a child, it does not count as an asset for financial aid purposes.
3. Stay connected on their plans
A 529 plan shouldn’t just be set-it-and-forget-it — even though it can be with automatic investing and accelerated gifting. Keeping clients educated and up to date about investment options, plan choices, and federal student financial aid changes that may come up can help them make informed decisions about their plans — and let them know you’re keeping an eye on it.
Saving strategies should be reviewed periodically. For example, clients can be reminded of their options should their financial situations change. For example, using accelerated gifting to superfund a 529 plan may not have been possible for a parent or grandparent one year, but maybe it is the next year.
Build trust too
Being seen as a trusted resource is a gift that keeps on giving to you. A college education can make a significant impact on a child’s future. Helping your clients give that to a child, grandchild, or family friend is priceless.
Share our straightforward guide with clients: ABCs of Education.
Don’t let misconceptions about 529 plans haunt your clients. With expanded qualified uses these plans are more adaptable than ever.
The recently passed Big, Beautiful Bill brings sweeping changes to how American families can save for the future.
College tuition continues to increase steadily — earlier savings can help you leverage compound growth
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Not a Deposit - Not FDIC Insured - Not Guaranteed by the Bank - May Lose Value - Not Insured by any Federal Government Agency
Before investing or sending money for your client, consider whether their or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program.
For more information about CollegeBound 529, call 877 615 4116 or visit www.collegebound529.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Invesco Distributors, Inc. is the distributor of CollegeBound 529.
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