News From the Control Tower:

No, a child may not squeal with delight upon opening this gift, but sometimes they don't know what's good for them! The benefits of an education last a lifetime. With a 529 account, the beneficiary enjoys tax-deferred growth and tax-free distributions for qualifying education expenses. One option is to let your friends and family know that your child's 529 plan is open to accepting gifts. Each state offers its own 529 plan, so the how-to of gifting varies depending on the state. For example, New York offers a gift code you can share. Illinois's 529 plan offers instructions here on giving a 529 gift. Another option is to simply open a new account, and name the beneficiary you chose (and keep the potential tax deduction to yourself!*)

As financial advisors we spend a lot of time talking about retirement planning, but we can also help you navigate a college savings plan that’s best for your family’s situation. Those who make a plan save, on average, twice as much as those who don’t. First, I want to stress that your priority should always be your own retirement savings. There are no loans available for retirement like there are for college. Being a financial burden on your future children is not a legacy you want to leave.

In late May 2019, the House passed the Secure (Setting Every Community Up for Retirement Enhancement) Act by a bipartisan majority (417-3). The bill currently awaits passage by the Senate. Many analysts expect it to pass substantially as-is, although there is some squabbling over revised rules for 529 plans (college savings plans). The impetus behind the bill is to help rectify the looming retirement crisis – the majority of Americans are not on track with their retirement savings. One goal of the act is to incentivize employers to put retirement plans in place.

Financial Stability does not have a simple definition in terms of the American household. We polled friends, family and clients to see how they would define it. Most of our responses alluded to having enough money to cover your bills and being able to address emergencies. One response was very direct and simply stated, “Uncommon.” My favorite response was, “when your kids move out of the house.”

Happy New Year! Each new year brings new challenges in the market and new rules issued by Congress! The following are real questions posed by real clients. We hope that you find an answer to some of your questions here as well. Continue sending questions to any of our advisors to make this regular newsletter section up-to-date and relevant for other clients.

Happy New Year! Now is a great time to assess your retirement and savings strategies and plan for the year to come. Keep in mind you can still contribute to an existing traditional IRA, Roth IRA or Coverdell Education IRA for 2018 until April 15th.