College Planning

If your like most parents your probably wondering how you are going to pay for your children's college. At Riverfront Asset Managment we offer a unique college savings approach that drastically reduces the cost to our clients. The cost of education is currently far outpacing the rate of inflation which means college is something that requires a long term approach and action sooner than later. We offer parents many ways to help save for their son or daughters college education but we have found that the best way is with a 529 plan. Below we have answered some commonly asked questions regarding 529 accounts. For more information or to set up an appointment with one of our advisors please Contact Us.

What is a 529 plan?

A 529 plan is named after Section 529 of the Internal Revenue Code and is a savings plan that provides a tax-advantaged way to save for qualified higher education expenses. Anyone can open a 529 savings account regardless of income level and contribute up to $13,000 ($26,000 for married couples) a year without gift-tax consequences. Some qualified higher education expenses include tuition, fees, books, supplies and equipment required for enrollment, and room and board.

Your withdrawals are exempt from state and federal taxes as long as they are used for qualified expenses and in many states you have the ability to deduct your contributions (varies by state) on your state income tax return. You should speak to your financial and/or tax adviser for more information on your states tax benefits.


What are the Costs?

This is where we offer a very unique opportunity to those that are trying to save for college. Most 529 plans are offered on a commission basis which is a model that our firm does not believe is the best for our clients. We charge a flat fee of $50 to set up the account and that's it. We will monitor your account to make sure that it is invested to best meet your college saving needs and notify you if changes need to be made to the portfolio.

At Riverfront Asset Management we believe that education is very important and we provide this low cost option to encourage college savings. Riverfront Asset Management will only charge and receive a one-time setup fee.


Are there income limits?

There are no income limits for a 529 savings plan.


Who controls the account?

The owner controls the account and is the one that would receive the state tax benefits against their income. The owner of the account is who owns the assets. They can change the beneficiary as well as decide when withdrawals will be made. Essentially the owner remains in complete control of the assets.


Are there penalties for non-qualified withdrawals?

Since 529 accounts grow tax free there is a 10% penalty on earnings withdrawn for non-qualified expenses. If only used for qualified expenses then all contributions and earnings can be withdrawn tax-free.

Please contact us today to discuss any questions that you may have about college planning. We understand that every client has different needs and we provide the guidance they need to accomplish their goals.