Tag Archives: 529

April 2022 Financial Planning and Capital Market Review – By John Kvale CFA, CFP

Hello and Welcome to our April 2022 … Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!

Hope you enjoy!

April 2022 Video

YouTube

Financial Planning Tip(s)

Back to Basics Series – Educational Funding

In our continued fun “Back To Basics” Series here we discuss Educational Funding…

Here is one very important item to remember from the post:

Did you notice we put Retirement Planning BEFORE Education planning? Do you recall in Part 3 in Debt Planning we said one of the few good debts are educational related debts ….We of course are not advocating Student debt/loans… but they are available in abundance and again not a bad debt. There are not retirement planning loans…. just saying!

Proxy Vote Reminder

In this post we remind you to please reach out if you have fallen off the list for us to proxy vote for you!

If you are getting those pesky Proxy Notices (some can be small books- oh the trees that are destroyed- digressing) reach out to us, we not only vote the Proxies for you, but we get one single notice for everyone, and Jen has done an excellent job in getting a great deal of those electronically…. Did we say how Green this is?

Capital Market Comments

The Slowdown is Here

We first started speaking of the slowdown in our Q 1 2022 Newsletter here in our “Anatomy of a Slowdown” main aricle actually released in December of 2021….

And then again, here in our Q 2 2022 Newsletter ….

Then again here, here, here, here, and again here.… among a few other times…

Last week the BEA “Officially Released” a negative GDP print as noted here in our post and in this chart….

Never get the timing exactly, but we are not surprised and have been waiving the flag here in our talks and are prepared!

Have a Great Day, Talk to You at the End of May!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Back to Basics Fun Educational Review – Part Five – Education Planning … The 529 – The Not to 529!

Welcome back to Part Five of our “Back to Basics” series .. we hope you’ve enjoyed the First Four which started with all about “The Emergency Fund” in Part 1 … with Part 2 being “Protection Planning” and Part 3 discussing All about Debt Planning or “The Good the Bad and the Ugly of Debt”, Part 4 Retirement Planning and now we happily bring you Part Five Back to Basics Education Planning!

As a reminder this is a high level Financial Planning Education like overview starting with the basics of and we will continue into advanced topics in order of Planning Importance.  

Did you notice we put Retirement Planning BEFORE Education planning? Do you recall in Part 3 in Debt Planning we said one of the few good debts are educational related debts ….We of course are not advocating Student debt/loans… but they are available in abundance and again not a bad debt. There are not retirement planning loans…. just saying!

Education Planning

Very similar to the most important parts of retirement planning, education planning carries many of the same qualities but with a few caveats:

  1. Start Early and if you do consider a 529 plan due to the tax free compounding features.
  2. With many states giving you a state income tax bracket break for your 529 contributions … making those states a green light to fund a 529 right up to the years a student is about to attend or is even attending –
    1. Planning Strategy– if you are very near the student using the 529, only fund the amount needed to get the deduction on the state level. Those residing in states where there is no state income tax deductions have far less benefits to the late funding/in and out of 529 state deductible contributions.
    2. Second Planning strategy– late funding plans of any type should be in VERY safe almost emergency funds like asset classes since their use will be so fast.
    3. Third Planning strategy– Do not overfund a 529 as if you do there can be stiff tax penalties for non-educational uses.
  3. Think of educational funds as fast use retirement funds, therefore make sure the allocations are very conservative as the child approaches use age.
  4. Make it easy for Grandparents and others to contribute to an Educational fund, we find other generations very frequently help with Educational Funding since they also know the importance, but may be more set in their retirement funds…

Education Costs are Increasing Fast

Not withstanding the above warning of overfunding a 529 plan, understand that higher education costs are rising very quickly as noted here in detail and be sure to plan accordingly … here is our favorite chart on the Growth of Student Loans:

Have a Great “Education Planning” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

WARNING for All Parents Using 529 Plans for College Funds Currently

Attention all parents using 529 funds for college funding, please be careful NOT TO take your spring (2016) distribution this year (2015). While the bill may already be in your mailbox, the IRS frowns upon mismatching of tax years.

Match your Distribution years529

We do have known contacts of IRS problems associated with the spring tuition payment being taken out this year – leading to the appearance of a much greater distribution in the current year. Unfortunately many colleges don’t give a great deal of time to pay spring tuition, however the IRS wants us to keep the bills associated with our college funding in the same tax year. 

If you’ve received your spring tuition, hold off on taking that 529 distribution until next year. Otherwise the IRS may be at our doorstep! Accidents do happen, and it will not be the end of the world, but if possible dot the i’s and cross the t’s on this one !

Some really neat stuff coming in the next few weeks…but that is later…enjoy your weekend !

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225