While the GET program is a prepaid tuition plan, the Dream Ahead plan has multiple investment choices with varying degrees of customization. The risk and returns of the program are tied to the financial market’s performance. The customizable features include the “year of enrollment” option that automatically adjusts the investment mix as a student nears college enrollment age, as well as stand-alone options that provides investors the flexibility to set and adjust the investment mix as they go. All in all, the new plan looks solid with low-cost investment and management fees and a reasonable line-up of investment choices.
ALWAYS CONSIDER YOUR OPTIONS
Since there is no tax benefit for Washington State residents to invest in the Dream Ahead plan, we believe there are other low-cost 529 college saving plans to consider, such as the Utah My529 plan, that should be evaluated prior to investing in the Dream Ahead plan.
Finally, new legislation allows current GET unit holders to transfer their balances to the new Dream Ahead plan at incentive based pricing, depending on when the GET units were originally purchased. This transfer should be carefully evaluated prior to making the move.
PLAN AND PREPARE
A structured savings and investment plan is the best way to prepare for your children’s college education. At Soundmark, we spend a substantial amount of time reviewing all higher education investment options and implementing a savings plan that works best for you and your family.
If you have any questions about the new education investment plan or your current college savings situation, give us a call.