From the Desk of Dale Crossley and Evan Shear

We hope you and your family are enjoying a relaxing summer. While there is still time to savor the rest of the season, this coming month marks preparations for a new school year and often prompts families to consider education expenses and planning. With the average cost of a four-year college degree approaching $150,000, we thought it would be helpful to share some helpful articles on education funding. As you review the many tax-free savings and estate planning benefits, there is no one-size-fits-all approach, so we can help you find the best options to suit your financial plan.

A popular education investment account is a 529 plan, a tax-advantaged investment account designed to help families save money for a child’s education. A recent update to the Secure 2.0 Act will soon provide an opportunity to revamp savings by allowing beneficiaries to make tax-free and penalty-free rollovers from 529 plans into a Roth IRA for a portion of the unused funds. This new law helps remove concerns about overfunding a 529 college savings account and ensures that families that save for their child’s education are not later penalized. This article offers important information on the eligibility and requirements of this provision in order to reposition money in a 529 plan in the event it isn't used for education.

Additionally, these education planning resources offer further valuable information on the benefits of a 529 plan, such as which education expenses qualify, how it compares to other savings strategies, and how it can be used as an estate planning tool. In addition, there’s an article on the benefits of using a securities-based line of credit (SBL) instead of student loans.

We hope you find these resources a helpful starting point to further discussions with your planner. Please feel free to contact us for guidance throughout this process and for help examining which options best align with your needs and goals.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

 There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. All opinions are as of this date and are subject to change without notice. Past performance is not a guarantee of future results.

 Raymond James does not provide tax or legal services. As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. Investors should consider, before investing, whether the investor’s or the designated beneficiary’s home state offers any tax or other benefits that are only available for investment in such state’s 529 college savings plan. Such benefits include financial aid, scholarship funds and protection from creditors. The tax implications can vary significantly from state to state.

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