Los Angeles, CA (April 3, 2019 @ 6am PT) — In honor of National 529 Day, U-Nest, the first and only mobile app helping families build, manage, and optimize a tax-free college savings plan, today announced it will provide three free months of account management to new users who sign up between now and May 29, 2019.
A recent U-Nest study found that 90 percent of parents believe they should pay for at least some of their kid’s college education. Surprisingly, 70 percent of Americans haven’t heard of a 529 plan (which experts agree is the best way to save for college).
While parents want to do all they can to save for their kid’s education costs, U-Nest found that the results are typically less than satisfactory:
- 40 percent of parents aren’t saving anything for their children’s education
- More than half (56 percent) of parents are worried they’re not saving enough for their child’s education; of those parents that are saving, 35 percent still feel they are not saving enough
- Close to half (41 percent) of parents age 18-35 are still paying off their own student loans
- Most parents (61 percent) wish their own parents would have saved more for their education
“National 529 Day is a great time to take stock of your savings plan and open a 529 savings account to ensure you and your children are financially prepared for college when the time comes,” said Ksenia Yunida, CEO and Founder of U-Nest. “Student debt in America has reached an astronomical $1.5 trillion, with millions of graduates burdened for decades trying to pay off their student loans. As a mom of three young children, I understand the stress of saving for this huge expense, but it’s never too late to get started.”
U-Nest has compiled the FIVE MUST-KNOWS on 529 plans:
- It’s the best possible college savings vehicle: A 529 has an average annual return of 6-7 percent based on historical data, and each parent can contribute up to $15,000 per year for each beneficiary (or $30,000 for a couple filing jointly). With college tuition rising at 6 percent annually, there is no better way for families to save for their children’s future than investing in a tax-free 529 plan.
- Tax-free earnings: All 529 plans grow tax-deferred, and proceeds are tax-free when used for qualified educational expenses, regardless of state. A 529 is similar to a Roth IRA – after-tax dollars are deposited, and all investment earnings grow tax-deferred at both the federal and state level.
- Not all 529 plans are created equal: Some states offer additional tax deductions to their residents, but that doesn’t mean that your home state is the best option. Those additional incentives can be offset by higher fees from the plan administrator. When choosing the right plan, families need to look at various other factors including historical returns, investment management fees, broker-dealer commissions, as well as stability and reputation of the investment firm. The team of financial advisors at U-Nest has performed a rigorous analysis to select the best plan for families based on multiple criteria including historical returns, fees, and stability and reputation of investment management firm.
- Flexibility: Tax-free investments from a 529 plan can be applied in a variety of ways: tuition, books, room & board, computers, and equipment. And, based on new legislation that passed in 2018, individuals can now apply the proceeds of the 529 plan not only to college-related expenses, but also to schools K-12 (up to $10,000/year). This is great news if your child attends private school.
- Parents are in control: Many common investment accounts and custodial accounts are designed for minors, and controlled by the child. With a 529, parents retain control of the account. The beneficiary can be easily switched if a child no longer needs the funds, and the account can also be used for a parent’s continuing education.
U-Nest is the first digital financial advisor to simplify and democratize saving for college with a 529 Plan. In as little as five minutes, parents establish a 529 Plan through U-Nest, set monthly contributions based on the in-app college savings calculator, track their progress, and easily adjust contributions over time, all from their phones.
U-Nest financial experts optimize plans to ensure money is invested in the smartest way possible based on the available plans, the child’s age, and the parents’ contribution level. Unlike financial advisors that cost upwards of $200 per hour and have complex underlying fee structures that add up to hundreds of dollars in annual broker-dealer commissions, U-Nest’s advisory fee is a simple and transparent $3 per month, and will be waived for three months for new users who sign up between now and National 529 Day on May 29, 2019.
This survey was conducted by independent research firm Survata on behalf of U-Nest. Survata interviewed 506 U.S. adult parents over the age of 18 between February 4-15, 2019. Complete findings of the survey are available upon request.
U-Nest is on a mission to help all parents simply and smartly save and grow the money needed to fund their children’s education. With an easy-to-use mobile app that in minutes establishes and manages a 529 College Savings Plan, U-Nest gives families the tools they need to fund a comprehensive savings plan so their children are free to pursue the education they deserve without being saddled with crushing student loans. The U-Nest team has decades of experience as certified financial advisors, fintech technologists, and entrepreneurs.
The company is based in Los Angeles, CA. To find out more and get started, visit //unest.co/.