Education Plan Recommendation Example
Change contributions to your 529
We do not recommend that you fund more than 50% of your education savings goal in a 529 plan. This is because, should your child either not attend college or receive scholarships, you could end up over-funding the account. Non-education related distributions from the 529 plan are subject to a 10% income tax penalty. Reduce your annual 529 contributions to $1,800/year ($150/month).
Education Plan Recommendation Example
Establish and fund a UTMA account
A UTMA (Uniform Transfer to Minors Act) account can hold physical assets, like real estate, art, or vehicles, in addition to financial assets such as stocks, cash, mutual funds, etc. Another benefit is that the UTMA usually allows you to delay when the account transfers to your child’s ownership. For example, Washington’s age of trust termination is 25, so you can specify that the assets don't transfer to your child until then, instead of at age 18. Once established, fund with $1,800/year ($150/mo).
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