FOR FAMILIES PLANNING AHEAD
College arrives sooner than the savings do.
Funding an education while still building your own future is one of the hardest balancing acts in personal finance. We help families do both deliberately, rather than hoping it works out.
WHAT THIS LOOKS LIKE
The number keeps moving
Published tuition is rarely what a family actually pays, and the gap between sticker price and net cost varies enormously by school. Planning against the wrong number is the most common mistake we see.
Two goals, one paycheck
College and retirement compete for the same dollars over the same years. There is no loan for retirement, which shapes how we sequence the two — but that does not mean education has to come last.
The rules are not intuitive
Which accounts you use, whose name they are in, and when you draw from them all affect aid calculations and taxes. Small structural choices made early can matter more than the amount saved.
THE QUESTIONS WE HEAR
Families ask us the same five questions. Here is how we answer them.
None of these have a single right answer. They have an answer that fits your family, your timeline, and the rest of your plan.
"How much should we actually be saving?"
It depends on the kind of school you are planning for, how much of the cost you intend to cover, and how many years you have. We work backwards from a realistic target rather than a round number, and revisit it as your child gets closer.
"Is a 529 the right account for us?"
529 plans can provide tax-deferred growth and tax-free withdrawals for qualified education expenses, and Pennsylvania offers a state income tax deduction for eligible contributions. However, they also involve certain limitations and restrictions. We compare them with other available options based on your specific goals and circumstances.
"Will saving hurt our chances for financial aid?"
Less than most families fear. Aid formulas treat parent-owned assets far more favourably than student-owned ones, and retirement accounts are generally excluded. How accounts are titled matters more than whether you save.
"Should we prioritise college or our own retirement?"
Your child can borrow for school; you cannot borrow for retirement. That does not mean education comes last — it means we fund both on a schedule that does not quietly sacrifice one for the other.
"What if our child does not go, or earns a scholarship?"
There are more options than there used to be. Beneficiaries can be changed, and recent rules allow limited rollovers of unused 529 funds into a Roth IRA under specific conditions. We plan for the outcome you want and the ones you do not expect.
“
Parents apologise for asking about college before retirement.
They should not. Wanting to give your children a start
is not a competing goal — it is part of the same plan.
— MITCH HARRIS, CFP®
HOW WE WORK THROUGH IT
A clear process, not a black box.
01
Put a number on it
We estimate a realistic cost for the kind of school you are planning for, then work backwards to what funding it would take from where you are today.
02
Choose the accounts deliberately
529 plans, custodial accounts, taxable savings and cash each behave differently for tax and aid purposes. We match the structure to your circumstances, not to a default.
03
Coordinate with the rest of the plan
Education funding sits inside a larger picture that includes retirement, cash reserves and insurance. We make sure one goal is not quietly starving another.
04
Adjust as the date approaches
Allocations that make sense with fifteen years to go rarely make sense with three. We reduce risk on a schedule as enrollment gets closer.
Start earlier, decide more calmly.
A complimentary conversation with Kevin or Mitch. We will look at your timeline, what you have saved, and what a workable plan looks like from here.
Investors should consider, before investing, whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals for non-qualified expenses may be subject to income tax and a 10% penalty. Raymond James does not provide tax or legal advice.
Any opinions are those of the author, are subject to change without notice and are not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.
Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Past performance does not guarantee future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Be sure to contact a qualified professional regarding your situation before making any investment or withdrawal decision. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.
Please note that the legislature may make changes to the 529 to Roth IRA provision and/or the IRS may provide guidance on the provision. As an example, it is not yet clear whether or not beneficiary changes, rollovers, or other account transfers will reset the 15-year time period. Consider waiting to complete the transaction until the IRS has provided clarification. In addition, not every state may consider the 529 to Roth IRA rollover to be qualified for state income tax purposes. Consider consulting with a tax professional prior to completing the conversion. Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted.