By coinnews 
00:00 Speaker A
All week long on wealth, we’re talking about saving money for college using a 529 account. 529s are state sponsored investment accounts designed for you to save for higher education. And they’re powerful, because your earnings grow federally tax deferred and qualified withdrawals are tax-free. And today, we’re talking to our financial advisor and father of four here with more. We’ve got Andy Esser, financial advisor with Edward Jones. Andy, good to have you here. You advise people on managing their money for a living, but like most things personal finance, this is also a personal journey for you too. So talk to me about wearing both hats, financial advisor and parent, in your own education savings journey.
01:19 Andy Esser
Brad, thanks for having me. It’s not an easy role to split between having to be a father and try to fulfill my family’s own education goals and also work with potentially hundreds of families to help make sure that they’re making progress too. And Edward Jones recently conducted a survey of around 2200 people and shockingly, 52% of families, including parents, don’t even know what a 529 college savings plan is. And as a father, my job is to make sure that my kids’ potential is only their imagination, not their education, which is why I’m never going to be able to retire. I’m always going to be able to do something to help my kids move them along towards their goals to make sure they can be the best people they could be. But learning some things personally to help my own clients accomplish their goals as well, it’s a fulfilling responsibility and job.
02:46 Speaker A
And so, as you think about the strategy that that you’ve rolled out for yourself, I mean you talk about having to try and make sure that you’re filling four different accounts here or just making sure that everybody has access to the necessary amount for their own education goals. How do you even kind of start the process?
03:26 Andy Esser
Well, the starting point was to determine what our philosophy was going to be. Did it was it something where as I’m working with parents, what’s their philosophy on fulfilling a kid’s higher education? A lot of people grew up where they could just lifeguard during a summer, get enough education dollars that they could afford a semester’s tuition. That isn’t quite the case anymore, especially as education institutions are looking at some pretty big holes in their annual revenue because of federal cutbacks and research grants and potential contracts. They could be forgiven for maybe looking to have to hike tuition in order to close those gaps. So once we figured out how do we try to make sure what our philosophy is, then we’ve got to make the decision between is it an education savings account or something like a prepaid tuition account. An education savings account gives people the flexibility to choose investments and as you say have funds grow tax advantaged. But if a person likes their state tuition, their state college is there, and they want to make sure that that’s their goal, then we can look towards something like a tuition plan to maybe get education credits. There may be some state restrictions, but working with an advisor who’s in who’s familiar with a lot of different states’ plans can help make sure that you’re getting the right plan for your family’s goals.
05:22 Speaker A
What are some of the check-ins that you create as a family to really understand some of the education goals that are either reach goals or some of the baseline goals that the family and the kids, as they’re receiving their education, and then ready to, you know, submit an application, as you’re kind of planning all that, how do those check-ins go?
06:11 Andy Esser
The check-ins, when I’m these when I’m working with clients is to see, are they on track to what the goals were? I’ve got kids who range from age 12 to age one. My 12-year-old is beginning to get a sense of what college is and where she might want to go. My one-year-old can’t talk yet. So somehow, I’ve got to make sure that we’re setting him up for success for whichever direction he may choose to go. And that’s where some of the enhancements to 529s have helped make those check-ins a little bit easier. If somebody we thought was going to launch may want to go to something like an Ivy League school, if for whatever reason they have changed their focus on what they want out of life, we can help at least make sure that those dollars can be used in a way that are flexible and accommodate what their new goals are. And if more funds end up in their plan afterwards, those funds could be used to help pay down student loans, could even help jump start their retirement through a Roth IRA. So 529s have become a really attractive and powerful vehicle to help fulfilling whatever a family’s education goals may be.
07:53 Speaker A
You you have to excuse me if this is a simple question with a simple answer to it, but if you have multiple kids, do you need multiple accounts?
08:14 Andy Esser
No. But there can be advantages to having multiple accounts. For example, a kid, my 12-year-old and my one-year-old, they’re going to have vastly different investment objectives. My 12-year-old is closer to the finish line than my one-year-old. But if I had a one-size-fits-all education savings plan, I would have to homologate their philosophy, their their portfolio objective, among whatever my kids were wherever they were in their life stage. Some need more aggressive, some need more conservative. So the advantage to having multiple plans, the cost is is negligible, if any, to having multiple plans, but it helps to tailor make that portfolio for what that kid’s education goals are and also align with whatever market opportunities they’re going to make sense for them.
09:24 Speaker A
All right, Andy, you’re helping a lot of households save from uh potentially the realization of who the favorite child is by making sure that they’re having some very productive and constructive conversations about these college savings plans. Andy, thanks for taking the time.
10:00 Andy Esser
Brad, thank you.