Broker Check

Fast Facts That Make a Difference


A 529 Plan is a college savings investment account that is intended solely for the purpose of helping a student pay for their education and related spending. Under Section 529, these plans are administered in all 50 states and the District of Columbia.

Open to Anyone… Parents, grandparents, guardians or family friends can start a 529 Plan for a child and/or beneficiary. Investors can even create one for themselves but only one beneficiary can be listed on each account.
This is a tax advantaged program… A 529 Plan grows tax-deferred and withdrawals are also tax-free assuming the funds are used strictly for qualified education purposes. Plus, contributions which are considered gifts may qualify for a tax break.
Diversified Investment Options… 529 Plan account holders can choose from a variety of investments including Mutual Funds, fixed income money markets, stocks and CDs. In addition to creating an appropriate asset allocation (which can only be changed twice per year), there is also an age-based option which automatically adjusts more conservatively as the beneficiary gets closer to needing funds.
529 Plans Cover All Education Related Expenses… 529 Plans are not exclusively used for higher education. K-12 private school expenses can also be covered and will offer the same tax advantages. In addition, funds can be used to cover supplies, tuition, room and board and since 2019, can also help settle loan repayment.
Contribution Caps and Minimums… Though they differ by state, 529 Plans have total contribution limits ranging from $235,000 to $529,000. There are also initial lump-sum and contribution minimums (around $25 to $50) depending on the plan. Be sure to review your state’s policies.


Avoid Probate… When beneficiaries are properly designated, retirement accounts can help avoid the costly and drawn-out process of probate.

Prevent Family Feuds… Proper beneficiary designations along with the continuous review of your family dynamics can help reduce the risk of family battles when your estate is being settled. 

Combine Teams… Minimizing both estate and income taxes by designating the appropriate beneficiaries can be challenging but coordinating the efforts of you financial planning and legal teams can help streamline the inheritance process. 

Name that Trust…Naming a trust as an IRA beneficiary can help them take possession of your retirement assets in the event the true designee is unable to due to their age, a disability or is unable to responsibly manage a large sum.  

Manage Income with RMDs…  Coordinating the income stream from required minimum distributions, along with naming the appropriate designated beneficiaries can help assure you can live the same quality of life in retirement while planning your legacy.


Start with a Will… Without a will the state will determine what happens to your property and assets. It is even more imperative to create a will if you have no living relatives but do have intentions about the distribution of your estate. The same is true if you are unmarried with a long-term partner. Without a will the state will not acknowledge that relationship.

And then Add a Living Will… End of life medical decisions will only be honored if the patient has created a Living Will. This directive, aka power of attorney, is the only legal means someone has to make sure their wishes are followed if they are unable to personally state them.

What is a Trust? It is a legal document that holds, distributes and controls the administering of your assets either while living or passed on. 

Don’t Forget to Change the Title of your Trust… Investors can go through the time and expense of setting up a trust but not change the title/registrations of their accounts to the trust. Without that one important step the trust can be nullified, and the settlement processed through a will and/or probate which defeats the purpose of the trust.

Legacy Plans are not Static…  Life is filled with change such as health issues, births, divorce, relocation, retirement, death and even new tax codes. All of these factors can affect the intentions of a trust and should be reviewed on a regular basis to make sure the trust remains accurate and serving the intentions of the trust owner(s).

Help your Attorney Help You… Before you meet with your lawyer, decide who will be the primary and secondary heirs to your estate. Also provide the name of the competent person who will be administering your estate. In addition, bring the following documents: wills, living wills, list of investment and retirement accounts, life insurance policies along with titles and deeds.

FAST FACTS ABOUT RMDs (Required Minimum Distributions)

After decades of not paying taxes on their retirement accounts, investors often forget that the money is only tax-deferred, not tax-free. Starting at age 72 (or age 70 ½ if you reach that age before January 1, 2020), the IRS requires that you take an annual withdrawal called an RMD and pay tax on that distribution as it is considered income.

The 2020 CARES Act Waiver… Due to the pandemic, the Coronavirus Aide, Relief and Economic Security (CARES) Act waived the 2020 Required Minimum Distribution for retirement account holders. However, that waiver did not extend to 2021 although future legislation might. 

The 2020 SECURE Act and Non-Spousal Beneficiaries…  As of January 1, 2020, non-spousal beneficiaries of decedents who passed away on or after that date now have up to 10 years to withdraw their entire Inherited IRA. Previously, they could stretch it over their lifetime expectancy in order to defer taxes.  

No Fooling. Initial Withdrawal is required by April 1… You are required to take your first RMD by April 1 of the year after you reach the required age or face a stiff IRS penalty. That penalty will equal 50% of the amount not withdrawn in time in addition to the income tax due. After that initial withdrawal, the subsequent deadline is December 31.

Another Reason Not to Delay… If you wait to take your first RMD by April 1 of the following year you turn RMD age, you will have to take two RMDs, one for the previous year and one for the current year. This could possibly push you into a higher tax bracket so be sure to discuss with your tax consultant before making that decision. 

How Much To Withdraw… The RMDs rules differ for IRAs and 401ks, so it’s always best to check with your financial advisor to be sure you are withdrawing the correct amount. That amount is based on age, account balance (as of Dec. 31 of the previous year) and life expectancy.

When to Take the Money…  December 31 is the deadline for taking the RMD but withdrawals can be taken any time prior to that. You can even have the money withdrawn automatically every month or quarter depending on your needs.

Roth IRAs are exempt… If you are the original account holder, there is no RMD on a Roth IRA account because you paid taxes on that money prior to making the contributions. Inherited Roth IRA accounts are not exempt.

Want to be Smarter With Your Money?

Join our mailing list and get news and info to support your financial goals.

Thank you! Oops!