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Maria Bruno: Hi. I’m Maria Bruno, head of U.S. Wealth Planning Research here at Vanguard.
Joel Dickson: And I’m Joel Dickson, global head of Advice Methodology at Vanguard. Welcome to our podcast series, The Planner and the Geek, in which we will discuss topics that are important to individual investors.
Maria Bruno: And we’ll have some fun along the way.
Joel Dickson: Welcome to our latest podcast. Maria, good to see you again.
Maria Bruno: You as well, Joel.
Joel Dickson: Thank you.
Maria Bruno: Let me be the first to wish you a belated happy 529 Day.
Joel Dickson: Thank you very much. When is 529 Day, huh?
Maria Bruno: May 29.
Joel Dickson: Oh!
Maria Bruno: That’s the 5-29!
Joel Dickson: Does that mean that that’s going to be somehow tied in to our topic today?
Maria Bruno: Yes, exactly. We were just talking about 529s the other day in the office.
Joel Dickson: Yeah, those being college saving plans?
Maria Bruno: Exactly. So today we’re going to talk about college savings options, primarily 529 plans, so what they are, how you can use them, how to pick one, and then we’ll also cover important considerations as you start to shift from college savings to paying for college. So how do you balance financial aid and taxes as you spend from your savings?
Joel Dickson: Do I get to talk about spending from 529 plans since I’m kind of in that mode at the moment?
Maria Bruno: Sure.
Joel Dickson: Okay, so we’ll cover the whole gamut of the college sort of saving-and-spending experience, if you will.
Maria Bruno: Yes, and I think it’s a good topic. It’s one we often joke about that we get stopped in the hallways when someone has a baby, and they have a question in terms of which 529 plan to invest in, what they need to think about. So, Joel, 529s are one savings vehicle. Let’s talk about that a little bit. There’s other savings vehicles for college planning as well. So I think that’s actually a good start to today’s podcast in terms of thinking through what are the college savings options and what are the trade-offs of different types of accounts. So let’s start first with 529 plans.
Joel Dickson: Which just recently has become the largest source of saving for dedicated college saving expenses, by far.
Maria Bruno: Right. So they have been becoming more popular, more commonplace. So let’s talk a little bit about what a 529 plan is. So it’s a college savings vehicle that is tax-deferred, meaning when you make contributions, the accounts grow tax-deferred. Assuming that the withdrawals are made for qualified education expenses, then the withdrawals are income tax-free and penalty-free.
Joel Dickson: So I could think about that as a Roth version for college.
Maria Bruno: Sure. That’s my line, but sure.
Joel Dickson: Oh, I’m sorry I stole your line. But, yeah, so you make after-tax contribution?
Maria Bruno: Right. The thing with the 529 though is that in many states- So these are state-sponsored plans, meaning there isn’t just one 529 plan, but these are plans that are sponsored by different states. And when you invest in them, most states will allow a state tax deduction or some type of credit in the year that you made the contribution. That’s a little bit different than a Roth account.
Joel Dickson: And so it’s almost like an extra tax advantage then in many ways.
Maria Bruno: Yes. So there’s an added tax benefit there, right.
Joel Dickson: I’m going to start with a little fun fact. I know I’m stealing your thunder on fun facts.
Maria Bruno: Sure, okay.
Joel Dickson: So 49 out of the 50 states sponsor 529 plans. Do you know the one that doesn’t?
Maria Bruno: I don’t. Does it matter?
Joel Dickson: So it is Wyoming, but I think actually you just alluded to what is really an important point and a feature of 529 plans, which is?
Maria Bruno: You don’t necessarily have to invest in your state plan.
Joel Dickson: Right, exactly.
Maria Bruno: So how do you navigate the decision-making? One would be look at your in-state plan.
Joel Dickson: To see if you get special benefits.
Maria Bruno: Right. So some states you have to invest in the state plan in order to take advantage of any of the tax benefits at the state level. My message there is much as you would with any decision-making around investment accounts is look at costs and diversification. The good part with 529s is that many plans will offer age-based options, so when you think about navigating the investment choices, we see this in retirement plans as well or IRAs when you think about target-date funds. Most 529 plans will offer diversified all-in-one-type options that will move more conservatively as the child starts to get closer to or through college. So the nice part about that is it handles the diversification, the rebalancing, the asset allocation, once you make the plan choice.
Joel Dickson: Yeah, so that’s kind of the autopilot version of college savings and have it become on a glide path and you worry about making the contributions in savings and the investment piece of it, hopefully, can take care of itself through a glide path or certain approach.
Maria Bruno: And most plans will offer both options, either an age-based option, which is an all-in-one type-option, or single-fund options where you can pick and choose your specific investments.
Joel Dickson: Yeah.
Maria Bruno: So there’s flexibility of investment options within the tax-advantaged account. So that’s one of the big bonuses.
Joel Dickson: I mean it’s not just sort of that like the unique setup, but different features of 529s that could be very advantageous or that are, in some ways, in many ways, unique as an education savings vehicle. And, I think about the idea that pretty much the account ownership piece of it, pretty much anyone can be the owner, and you have a beneficiary and then the contributions are, in essence, completed gifts under the tax code. That’s a very different model than we usually see for other savings type plans.
Maria Bruno: Right. So let’s unpack that a little bit. So when you open up the account, you have the account owner and then you have a beneficiary. And they can be the same. So you can open a 529 for yourself or each-
Joel Dickson: As I have, but we’ll get into that I’m sure at some point.
Maria Bruno: Are you going back to school?
Joel Dickson: I’m not planning to go back to school, but I’m using it for other reasons that I’m sure we will get into in just a moment.
Maria Bruno: Okay. Where was I?
Joel Dickson: You were talking about the account owner and the beneficiary.
Maria Bruno: Oh yes, so the account owner and the beneficiary can be the same.
Joel Dickson: You’re welcome.
Maria Bruno: They don’t have to be. And then the other thing that is unique I think with the 529 plan is that there’s flexibility around changing the beneficiary. So, for instance, as a parent, you might have two children. You might have one child potentially that might get a scholarship, for instance. If that’s a situation where you might have an overfunded 529 plan, for instance, you can change the beneficiary and then transfer the balance to the other child, for instance. So there’s flexibility to be able to change beneficiaries without tax consequences. So what happens, Joel, then in that situation? As a parent you have a 529 set up- Actually, you did. You went through this as well too. So you have a situation where your son got a partial scholarship, for instance. How does that work in terms of, hey, I have this 529 plan set up, let’s talk a little bit about that. I’ve got the scholarship. Just a couple options that you have, right? So if you have funds that you need to pay, you can use it. If not, you can change the beneficiary.
Joel Dickson: Yeah, exactly. I have two children, one who’s in college, just finished his second year, and one who will be going to college in the fall and each has a 529 where I’m the owner and they individually are beneficiaries on separate 529s. I also have, as I just mentioned, a 529 where I have set it up where I’m the owner and currently the beneficiary. And, honestly, I’ve basically done that because I get a state tax deduction and I get tax-deferred growth and so I’m treating it as another kind of a tax-advantaged savings vehicle. And I’ll figure out how to kind of allocate that maybe down the road. So maybe use it for grandchildren, maybe use it if my kids are going to graduate school.
Maria Bruno: So you’re using it more as a wealth management tool knowing that you’re not going to need those funds for your children’s education.
Joel Dickson: Absolutely. I think of it as the off-label uses that we’ve often talked about with different types of accounts. This to me is a little bit of an off-label use.
But my son did, I mean was lucky enough—he did it himself; I mean he worked hard to get an athletic scholarship in school. And so the 529 savings that I had done, I didn’t need as much of that. Now there’s still room and board that are qualified expenses and books and all that kind of stuff that I can use the 529 plan for, but when I think about the amount that’s likely to be left in that account, I’m already trying to think about where might that go and how do we think about it maybe for some of my daughter’s education, change the beneficiary, maybe my son in terms of any graduate school that he might want to think about, so stay with him. But there are a number of choices to think about that.
Maria Bruno: Right. And there’s no time limit for the use of the funds either. So if he doesn’t use the money now and he’s thinking that he might go to graduate school later, the account can continue to grow tax-free, and then those monies are there then for other educational purposes down the road as well. So that’s a neat feature.
Joel Dickson: Right. And even in a worst-case scenario, I mean let’s say you don’t end up using it for qualified education expenses; you take the money out and you may have to pay taxes and penalty on the earnings within the account, not on the contributions themselves but on the earnings, but in that way you still may have benefited from the flexibility, from the tax-deferred growth. The worst-case scenario really isn’t that bad.
Maria Bruno: Right. It’s almost like the impact of taking money out of an IRA prematurely. Potential penalty and then the income taxes that will go on the earnings.
Joel Dickson: Right, exactly.
Maria Bruno: Okay, so let’s talk a little bit about qualified education expenses. So when we think about what we can use the 529 proceeds for, can actually use the withdrawals for kindergarten through 12th grade, so K through 12, along with higher education, trade school, room and board, equipment, books, things like that.
Joel Dickson: And equipment, before my son went to college, or as my son was going to college, got a new computer, printer, and those do qualify as qualified education expenses.
Maria Bruno: Yeah, nowadays, it’s actually part of the curriculum where you need certain things before you start.
Joel Dickson: Right.
Maria Bruno: So these are all outlined in terms of what qualified expenses are. If one is interested in detailing those a bit more, the IRS website Publication 970 goes over what constitutes qualified education expenses if someone’s interested in learning more about that.
Joel Dickson: Is that going to cover my daughter’s questions on qualified education expenses?
Maria Bruno: What are the questions? Are they her questions or your questions?
Joel Dickson: Well they’re kind of my questions, but there is some question about what is a qualified educational expense? And, in general, it is something that would be required for basically attendance required for classes or something like that. But, for example, my daughter is going and planning to major in dance, and so one of the questions I have is: Are point shoes that would be needed for dance classes part of qualified education expenses? But very quickly you find exceptions. It’s not just in dance but in other areas—what’s a qualified educational expense and what’s not.
Maria Bruno: But we’ll soon find out if there’s any IRS auditors that listen to this podcast, Joel.
Joel Dickson: That’s why I’m trying to find the answer before I do it. Often, though, I will say the universities often can help with knowing or having a list of what is qualified education expense.
Maria Bruno: Yeah, so if someone specifically has questions around it, they can have some sources for clarification there.
Joel Dickson: Correct.
Maria Bruno: Okay, so, Joel, we talked 529s. There’s some other education vehicles too that we’d be remiss if we didn’t talk through. One would be the education savings account, also known as Coverdell or ESAs. These are IRA-like options. Much lower account minimums.
Joel Dickson: Yeah, $2,000 a year maximum.
Maria Bruno: Right, and there’s also household income limitations on those. So I think prior to 529s becoming much more dominant, ESAs were an option. Probably now you don’t see as much of those because of the income limitations and then the flexibility around 529s and seeing the growth there and the tax benefits at the state level as well is generally more attractive.
Joel Dickson: Yeah, over time the sort of rules, at least around contributions and distributions, although there’s still differences between the Coverdells and the 529s, they’ve kind of converged more and more.
Maria Bruno: Yes.
Joel Dickson: I do think, I mean it was implicit in, Maria, what you just said, but I just want to make sure it’s clear for the listeners. Yes, there are income limitations for Coverdell contributions. There are not income limitations for 529 plan contributions.
Maria Bruno: Right. So that’s a difference when we think about IRAs and things like that. 529s, there are no income limitations for the ability to contribute.
Joel Dickson: Right. But, Maria, I do think the point, and it’s actually a similar one to retirement savings. There are many different ways to do it. There are many different ways of saving, some of which have benefits versus, and trade-offs just generally and trade-offs. So whether it’s Coverdells or 529s or you can use IRAs potentially for meeting some of these or taxable accounts or savings accounts, whatever it might be.
Maria Bruno: Well, the one thing we haven’t talked about, which is still kind of out there mainstream, not as much, are custodial accounts. U-G-M-A or UGMA-type accounts. And these are the custodial accounts.
Joel Dickson: You are old school.
Maria Bruno: I am. We both probably had those growing up. And those are assets that are held for the benefit of the child. When the child becomes the age of majority in the state, it becomes the child’s asset. So there’s a lack of ownership of control around those assets. But also, which we’ll probably talk about more, how they impact financial aid as well.
Joel Dickson: Yeah, and the UGMAs, and, again, this is where state differences come into play. In some states that age of majority is 18; in other states it’s 21.
Maria Bruno: Right, that’s at the state level.
Joel Dickson: So you have to know that, but assuming that the children know, I mean as soon as they turn that age of majority, those are their assets. They can just go and spend them pretty much any way they want. If my son next year, he has a small UGMA account, if I find that he’s taken a year off and going to Europe for a while, I’ll know what ended up happening and how he’s funding it.
Maria Bruno: Right. That’s one of the risks of custodial accounts.
Joel Dickson: It is. That’s why I bring it up.
Maria Bruno: Okay.
Joel Dickson: So there are lots of different ways. I mean one of the favorites that you have, and you wrote a blog on this several years ago, Maria, was you can also use potentially a Roth IRA to fund some college expenses. I don’t know that you should rather than you could, but how do you think about all of these different vehicles?
Maria Bruno: Yeah, I get that question a lot. And often say, if you have one, yes, you could use one. Should you invest in a Roth for college, I would probably suggest not to because a 529 is the preferred college savings vehicle. But the Roth IRA does, if you talked about off-label accounts, the Roth IRA does give you the flexibility to be able to tap the contributions income tax-free and penalty tax-free. So that’s a feature. And then also if you’re taking withdrawals for qualified education expenses, they’re penalty-free. You would have to pay income taxes on the earnings, but you wouldn’t be subjected to penalties.
So there is some flexibility there in terms of tax-free growth, the ability to tap the account. So if someone kind of has the account and maybe thinking through it, sure you can. I’m not really sure that it’s optimal for everyone, but it is another tool in the toolbox, if you will.
Joel Dickson: I do think the Roth also is a way that maybe was a little bit more advantageous several years ago before we had a bunch of changes to 529 plans either in terms of the conditions under which you could save and spend from them but also the fact that the costs of 529 plans have come down quite a bit over the last several years whereas before there might have been enough of an expense gap between 529 plans and investment options in Roth IRAs that that was a trade-off.
Maria Bruno: Right, yes, not so much an issue now, but absolutely prior. As the plans became more mature, costs, ensure costs have trended downward, which is a good positive trend.
Joel Dickson: One of the big things is: Why are we saving here? It’s to try to get a better after-tax benefit for college expenses. And so I think it’s actually helpful to think about, okay now we’re starting to get to college, or maybe a year or two before, and what are the decision points and thinking around how to choose a college, what kind of sources of aid might be available, and so forth. And so we actually had the opportunity to speak with a nationally recognized expert on the cost side of college and making college more affordable. And that is Lynn O’Shaughnessy. And Lynn is known many different ways for her expertise on college as a journalist, a speaker, an educator. Now we’re joined by Lynn O’Shaughnessy. Lynn is a nationally recognized expert on college costs and making college more affordable. Lynn is known many different ways for her expertise on college—as a journalist, a speaker, an educator. And Lynn shares more than a decade’s worth of college advice on her blog, thecollegesolution.com.
Lynn, thank you so much for joining us today.
Joel Dickson: In fact, we’ve actually been spending most of our time today talking about the saving and investing decisions around college. And that’s why your perspective on the companion piece to this, which is how do we think about the affordability of college and college costs is so integral to this overall discussion. So I guess where we’d like to start in terms of your perspective on it is when your child is in high school, where do you think about starting when anticipating what college costs might actually be?
Lynn O’Shaughnessy: Okay, great question. What I suggest families do is use an expected family contribution calculator. An “expected family contribution” means what a college would expect a family to pay at a minimum for one year of college. And when you get your EFC, this can help you determine will you get financial aid or not. And if you won’t get financial aid, then you would be looking for schools that give merit money. So it’s really important to find out, and it’s easy to find out, what your EFC is, and it’s expressed as a dollar figure. And the best source, I think, to get your EFC is to head to the collegeboard.com’s website and just type in EFC calculator. And to use this calculator, you’re going to need your income tax returns and also your account statements for nonretirement money. And you’re going to plug that in, and the EFC calculator will determine, okay, how much should you be able to afford for college. People will look at this thing and go, “Oh, my gosh, this is crazy,” but it is the formula that is used by colleges. So let’s say the lowest EFC you could get is zero. That means you have less than $26,000 in income a year. If you have a very low EFC, then you’ll certainly be applying to your state schools, community college, four-year college at the state school that has good financial aid. And, you know, if your child is a high achiever, you could look at some fancy elite schools that have very good financial aid because those are the ones that have the best aid. Now if you have a high EFC, let’s say your EFC is really high, like $60,000, like you’re expected to pay $60,000 a year, well, in that case the vast majority of schools, your EFC is going to exceed what their price tag is. So you’re going to be looking for schools that give merit scholarships, and the vast majority of schools in this country do give merit scholarships to affluent students. The exceptions are the most elite schools, like the Ivy League schools or the Stanford, MIT, University of Chicago. Those kinds of places don’t give scholarships or give a teeny, teeny number. So that’s just something you have to be aware of. Find out what your EFC is. I’d suggest this weekend just go and use that calculator, and that’s a great first start.
Maria Bruno: So, Lynn, to add to that, you touched upon some of the sources of college money. You talk about four main sources of college money. Can you share that with us today? And then as we think about that, can you, are there certain things that we should think about from the potential for each of these sources?
Lynn O’Shaughnessy: Right. Well the four main sources of college money are from the colleges themselves, state and private schools, the federal government, the state government, and private scholarships. Now the smallest source of money, and the one that I think, unfortunately, most people think is the biggest source of money, ironically, are private scholarships. Those are the ones that come from foundations, charities, workplaces. They are very small typically and also typically for one year. So I would not put, you know, a ton of energy into those if you think this is going to be a major source of funding. Now the biggest source of college money is from the schools themselves, and that’s why it’s important to know if schools are going to give your child money or not. You know, are they going to be generous to your child whether you are in that camp that’s going to need financial aid, or you’re not going to need financial aid, or you’re somewhere in between. State schools give a lot of money, especially to kids who aren’t from those states. It’s all based on merit. It’s based on your test scores, GPA, and it’s easy to look at a state school, whether it’s in your state or outside your state, and oftentimes they have it on their website, what it takes to get scholarships from those schools. Private schools are a little harder sometimes to evaluate; but, in general, schools, the more elite the school is, the more likely, in general, they will have excellent or very good need-based financial aid and not as good of merit aid if any. Most private schools do not meet their freshman goals every year, and so they have to scramble to attract students. So those schools, the vast majority of students get some kind of tuition discount no matter who they are. Now the next biggest source of college money is the federal government. Now to get money from the federal government, typically you will need to have income of about $50,000 or less and you will qualify for a grant called the Pell Grant, and that is the major monster program that the federal government provides. And, unfortunately, it’s not a large sum of money. Over the years it has not kept up with inflation. So typically if you are low income, making around $26,000 a year or less, you would qualify for the full Pell Grant, which is just around $5,600, $5,700. It’s quite small. Okay, so if you don’t qualify for federal grants, the Pell Grant, you will be able to qualify for federal college loans. But to qualify for those, no matter what your income is, you have to fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA. And then the final source of money is from the state government, and there are states that provide state aid, and it will vary by state. Some states, particularly in the South, tend to provide aid based on, you know, test scores or class rank, GPA, that sort of thing. Other states are focused on giving money to students based on their need.
Joel Dickson: Lynn, you mentioned the EFC or expected family contribution calculators that are available, website of different schools. Are there other tools you can use to evaluate the generosity of individual schools, which you said was just so important in trying to manage some of these differences across the different sources of college money and affordability?
Lynn O’Shaughnessy: Yes, there are. One that you absolutely need to use is called a “net price calculator,” and it will require you to use some of the very same information you’ve used to input in EFC calculator. Now every school has its own net price calculator on its website, and what it does is it will take, as I said, the same information you would use for an EFC calculator; and they will determine, okay, does this child qualify for federal aid, state aid, and, importantly, are we going to give this child any of our own money? And they can make that determination based not just on your financial situation, but if it’s a school that gives merit scholarships, a good calculator will ask for your kid’s GPA or test scores, maybe class rank. Ask some questions like that to determine any kind of eligibility for merit scholarships. So it’s crucial, I think, to absolutely use a net price calculator before you let your child apply anywhere, if money is an issue. And, frankly, money is an issue for almost everybody, even if you are high income.
Maria Bruno: So, Lynn, as you start to put all of this together and you think about the financial aid qualification, how do investment assets come into the picture, whether they’re 529 plan assets or investment assets maybe held in the parents’ name?
Lynn O’Shaughnessy: Right. Well I know that is something that parents, I think, obsess about. When I give talks at high schools, this is a subject that they’re very, very keen on. And what parents need to know is that assets typically don’t impact eligibility for aid. One reason is because retirement accounts aren’t factored in when you are, when a college determines if you will qualify for need-based financial aid. So you could have $1 million in your 401(k) or your Roth IRA or traditional IRA. It won’t matter. So we’re only talking about taxable money. And, also, college accounts. Like a 529, which I think is a great way to save for college. I certainly did that with my two kids. So that money, okay, taxable money and then education accounts like the 529 is assessed at no more than 5.64% and oftentimes less than that because you get an allowance. The financial aid formulas give you an allowance, so not all of your taxable money will be assessed. So it’s really a small, I wouldn’t even call it a penalty to save. In fact, I urge families to save as much as possible. To give you an example, let’s say you save $10,000 in your 529, your eligibility for aid will only drop by $564, like that’s nothing. Also, it doesn’t mean that you would get $564 more in free money, grants; it just usually means that you would have to borrow that much more. So, it’s, I can’t emphasize enough how important it is to save.
Joel Dickson: Yeah, Lynn, that’s very helpful. And related to that, and you mentioned before a little bit about the risk you get into your dream school, and then you figure out the costs afterwards, and then trying to sort of put the genie back in the bottle gets to be very difficult in that situation. How do you think about the cost-benefit decision? I mean you’re making an investment in future income for the student. But there’s a cost to that, namely the affordability of college. How do you normally talk about or think about the cost-benefit trade-off of deciding among colleges?
Lynn O’Shaughnessy: Okay, well, I think primarily the people who think this is a big issue and they have to sacrifice or pay for these golden ticket schools, right, the most elite schools, the ones that, unfortunately, seem to monopolize the media coverage, very elite schools. Most people are obsessed with those. But people who have more money are, and they think that this is critical to having their child succeed in life. But the studies have repeatedly, over and over and over again, showed that affluent students who go to these schools, very elite schools, they don’t derive a benefit from it. They are going to be generally going to have better salaries over their careers, regardless of where they go to school.
These schools, the kids who benefit from an elite education, and studies have repeatedly showed this, is students who are first-gen and low-income kids. They do, their salaries do have a bump-up because of that, but not the high-income students do not. You know, there’s been surveys done that have, I think, are fabulous, done by Gallup and Purdue, and they’ve been cited in a recent report done by the Stanford University graduate school of education. And they have emphasized that it’s not where you go to school that matters, it’s what you do wherever you land. That’s what matters. And those factors that count when you are looking at a school is have you had at least one professor who makes you excited about learning? Did you have professors who cared about you as a person? Did you have a mentor that encouraged you? Did you work on a project for a semester or more? Did you have an internship or job that allowed you to apply what you were learning in college? Were you extremely active at your school?
Those are the factors in this study that Gallup did and Stanford University repeated that the more you could answer yes to those questions, the more likely you were happy in your life and in your career. And yet the people who could say yes to all these, and they surveyed 30,000 people who had bachelor’s degrees, only 3% could say, “Yes, I could answer yes to all of those,” which is super sad. Right?
Maria Bruno: Lynn, these are all really good points. So we covered a variety of different points, some at a high level. Where could our listeners go if they wanted to learn more to get your perspectives?
Lynn O’Shaughnessy: Well, I have my blog, thecollegesolution.com where I, I guess you could say, pontificate sometimes because you might have picked up that I’m very passionate about this subject. And I just feel that parents and teenagers need to know, not just get sucked into conventional wisdom.
And so if you want to get a dose of reality, what’s really going on, check out my blog, thecollegesolution.com. And I also have an online class, which you can find out about on my website that actually parents from across the country, as well as overseas, have taken and high school counselors and college consultants to find out really how to evaluate schools correctly and how to reduce the cost of college when you’re getting near the time of having to pay for those bills.
Maria Bruno: Okay, great. Lynn, thank you very much for joining us. This was a lot of really good information—fun, useful, very practical information. Thank you.
Lynn O’Shaughnessy: Okay, you’re welcome.
Joel Dickson: Thank you, Lynn.
Maria Bruno: I would encourage if individuals want to learn more, go to our episode page for a few more of the sites that we referenced today.
Joel Dickson: Oh and also, I would encourage some. I’ll promote it for you, Maria, is a lot of these topics we discuss in that research that you had done financial planning perspectives, Tackling the Tuition Bill, which can be found on vanguard.com.
Maria Bruno: Right.
Joel Dickson: Well, I want to thank our listeners, again, for spending some time with us talking about, in this case, college savings.
Maria Bruno: We hope you enjoyed this episode of The Planner and the Geek. Just a reminder that you can find more episodes of The Planner and the Geek on iTunes and on vanguard.com.
Joel Dickson: Or simply subscribe to our series and you won’t miss an episode. And please don’t forget to rate us on iTunes. Your ratings will make it easier for others to find us when they’re looking for investing podcasts. Please join us next time for another episode of The Planner and the Geek.
For more information about any 529 college savings plan, contact the plan provider to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. If you are not a taxpayer of the state offering the plan, consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Vanguard Marketing Corporation serves as a distributor for some 529 plans.
We recommend that you consult a tax or financial advisor about your individual situation.
Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in target-date funds is not guaranteed at any time, including on or after the target date.
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