Many of our faithful clients here at DSWP have made good use of a particular financial vehicle that was created to help fund the college education of their offspring. Inspired by the IRS Rule 529, it is known as a 529 College Savings plan.

If you have been contributing to one of these 529 College Savings plans over the years, it is quite likely you have built up a pretty healthy balance – enough to make a decent dent in your kids’ or grandkids’ college expenses. And, if you have one of these plans, you might know that one can use 529 college savings accounts from any number of different sponsoring organizations. The fund contributions qualify for tax-deductibility in some states (AZ included) and grow on a tax-deferred basis. As long as the funds are used for ‘qualified educational expenses’ the savings and gains on the savings escape the taxman entirely since there is no reporting requirement.

As we approach the 2017 return-to-school season, we note that this year we are receiving an even larger than normal number of inquiries from those who are experiencing the joys (or pains) of getting their child ready for the fall semester at a college. In turn, we seem to be hearing one particular question rather frequently: ‘What is a qualified Educational Expense?’ Or in other words, what can we use the dollars for?

I ran across the following chart which provides a good general answer to the question. The chart is courtesy of our friends at American Funds. We hope you find it useful.  Feel free to pass it along.

 

Market Minute 7/14/2017 – Another Good Week. Hurray Markets!

Global stock markets continued their upward motion this week and relative strength continues to favor Emerging Markets and Europe over the U.S. markets.

In the U.S. we’re seeing conservative plays like utilities taking a step back as investors appear to be in more of a ‘risk-on’ mode. Although we don’t need to know the ‘why’ of the market’s disposition we can’t help thinking that perhaps it was, at least in part, Janet Yellen’s dovish testimony on Wednesday that prompted a nice jump in both U.S. bonds and stocks. That said, as I write this (mid-morning Friday) there are still a few hours left to unfold in this week’s market numbers, but at the moment all major US indexes are positive for the week. The leader is the tech-heavy Nasdaq Index* which at the moment is up about 2.7% for the week. (Disclosure – we favor the Nasdaq Index in the U.S. at this time.) Also of note – the general emerging markets index* is up about 4.1% for the week – like WOW! Enough said. This has been a strong week!

Market returns numbers from TDAmeritrade’s ThinkorSwim application

 

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051

Phone (602) 252-8700, Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at info@denkinvest.com.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

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