February 25, 2015 / 0 Comments

529 Plans: The What, Why and How by Winnie Sun

This year’s State of the Union speech stirred up discussion about the 529 college savings plans by threatening the tax-free withdrawal for education that makes 529s so popular. Thankfully, Obama has since dropped that piece from his education reform plan.

Since then, many of our clients have been asking: What is the 529 Plan? Why is it different from, or better than, other savings vehicles? How do I set one up? Read on!

According to Bloomberg, the price of college has risen 1,225 percent since the late 1970s. A study by FinAid.org projects tuition increases will double the cost of college every nine years. It is imperative that families save for education. In a recent study by MoneyTips.com, 30 percent of millennials list college debt as a detriment to their financial independence.

What is the 529 Plan?

The 529 college savings plans are tax-deferred accounts where parents can stow away up to $14,000 each year for their child’s education without triggering gift tax or eating into their lifetime estate and gift-tax exemption amount. They can also front-load five years’ worth of contributions to the plans as the Obamas did in 2008, contributing $240,000 in total for their two daughters to the plans.

Unlike a 401(k) retirement plan, families can only save post-tax dollars in a 529 college savings plan. As long as 529 funds are withdrawn for higher education, the investment gains are not federally taxed.

The early model of the 529 plans, conceived back in the 1990s, was similar to Obama’s proposal and not very popular. When Bush signed the Economic Growth and Tax Relief Reconciliation Act into law in 2001, the financial outlook improved for 529 plans. Assets in 529 plans have jumped from 19.4 billion at the end of 2001 to 245 billion in 2014, according to the Investment Company Institute.

Why is the 529 Plan different from, or better than, other savings vehicles?

According to Paul Curley, Director of College Savings Research at Strategic Insight, “Many products are used for savings such as taxable brokerage accounts, 401(k) plans and insurance products, although none are specifically geared toward paying for college like the 529 Plan.

Curley adds that if our government penalized the 529, “the current percentage of parents not saving for college would increase from its current percentage of 25% as reported in the attached graph. Additionally, the percentage of 529 users would decrease from the current percentage of 33% even though they would still gain federal tax deferral and state tax benefits on contributions and gains.”

How to Set Up a 529 Plan

Most states have a 529 plan, and some have more than one. The state picks a single administrator, usually an investment firm like Legg Mason or Fidelity, to manage the plan.

While you don’t have to choose a plan from our own state, doing so might provide a better tax deduction. One option is to purchase your plan directly from a financial adviser like us who will take the time to advise you on your family’s education savings plan. Each state’s fund(s) has different investments, fees, contribution limits and residency requirements.
529s come in two varieties: prepaid plans and investment savings plans.

  • The prepaid plans require payment for tuition ahead of time. Doing so locks in the school’s tuition rates, even if the tuition has gone up by the time your child enrolls. Some prepaid plans cover all higher education costs, while others can only be used for tuition and fees.
  • Savings plans are similar to IRAs or 401k plans in that you choose an investment option and your earnings are dependent upon the performance of the investments.

Although 529 funds allow withdrawals for non-education expenses, the penalties can be steep. In addition to the 10 percent government penalty, you’ll also be required to pay taxes on any gains. These penalties are waived when a child wins a scholarship or in the case of disability or death.

Finally, for families with more than one child, 529 beneficiaries can be changed each year. If there is money left over from one child, it can be used for another. You can even keep the fund open for your grandchildren, or to go back to school yourself. It’s nearly impossible to save too much in a 529 account.

For a complimentary consultation on 529 colllege savings plans, simply reach out to us via www.sungroupwp.com or www.corporate529.com.

June 25, 2013 / 0 Comments

“10 Myths About College Costs”

10 myths About College Costs
In the USA Today Article, “10 Myths About College Costs” Winnie Sun is quoted, “Most people will qualify for some aid, but if you don’t try, you’re automatically not going to qualify.” Wise words Winnie!

June 21, 2013 / 0 Comments

Campaign Letter

CAMPAIGNLOGO

 

Winnie Sun
Sun Group Wealth Partners
3 Park Plaza, St. 120
Irvine, CA 92614

 

An Open Letter to the CEOs of America’s Fortune 500 on the Education of the Next Generation of Employees

 

To America’s Fortune 500 CEOs:

Our firm, Sun Group Wealth Partners, has formed the Campaign for Next Generation Employees, a movement open to participation by all interested Americans in addressing the toxic environment of swelling education debt coupled with declining government aid for college. Lower and middle income American families face a frightening “Catch 22” now: Endure financial suffocation because they are educating themselves and their children or forgo the degrees to earn significantly less and be uncompetitive in the U.S. job market. What is the solution to this educational quagmire that shakes the very foundation of self-evolution our country was founded on? Ubiquitous company sponsored 529 Plans of our nation’s largest employers, members of the Fortune 500.

As members of the largest and most profitable corporations in America, your company has a great responsibility to both its employees and the greater good of the citizens of the United States of America. The CEOs of America’s Fortune 500 are in a unique position to make college educations accessible for the majority of Americans once more, which will benefit your employees, your business and create a stronger and more effective workforce for generations to come.

Can you imagine not educating your own children past high school? Should your employees feel any differently about their own families? People with college degrees earn more than $1,000,000 more over a lifetime than those who do not.* Sadly, a diploma often comes with a staggering price tag; most graduates average $25,000 in loans.* Student debt has ballooned to the $1 trillion dollar mark, eclipsing both credit card and auto loan debt.* Conversely, state and local support for higher education reached its lowest point in 25 years in 2011.*

The 529 plan allows employees to contribute after-tax dollars to their account. The account grows free from federal income taxes and as long as the money is withdrawn to pay for qualified school expenses, it remains federal tax free. (Tax treatment at the state level may vary. Non-qualified withdrawals may result in federal income tax and a 10% federal tax penalty on earnings. Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Please consult with your tax advisor before investing).

This is a valuable vehicle for your employees to fund the education of themselves, their children, grandchildren and beyond. Setting up a 529 plan for companies over 100 employees is free. Just as it is unimaginable today to have a large organization without a 401(k) retirement savings program, we believe widespread corporate adoption of the 529 plan with a company match is the next logical step to take in ensuring the futures of hardworking Americans everywhere.

 

Companies who decide to adopt these programs, or even better, offer matching programs, can:

Attract top talent in a competitive hiring market

Foster a work culture which views employees holistically as part of a family, in addition to an employee

Encourage better performance

Enjoy greater retention and loyalty from your workforce

Earn the respect and trust of tomorrow’s leaders, by having contributed to their education

Inspire adult learners within your organization to further their own education

Benefit your local economy by fostering an educated work force

 

We urge you to do the right thing and institute this program for your employees by calling the Campaign for Next Generation Employees at (800) 213-5888 or by posting on our Facebook page.

The Campaign for Next Generation Employees plans on taking the list of Fortune 500 companies who have taken this important measure for their human capital to the national media, political leaders and beyond and appreciate your support.

 

Sincerely,

Winnie Sun

 

*Georgetown University Center on Education and the Workforce

*Institute for College Access and Success

*Consumer Financial Protection Bureau

*The State Higher Education Executive Officers Association

 

downloadletter

June 19, 2013 / 0 Comments

Real Truth About College Debt

grads1

Higher education is now essential for many jobs and career paths.

 

Despite the clear need for college, tuition comes at a steep price, potentially saddling a family with overwhelming debt. A glance at the headlines reveals some scary insights about the increasing burden of student debt:
 

• Two-thirds of college seniors in 2010 graduated with student debt, averaging $25,000 each (The Institute for College Access & Success);

• Student debt has reached the $1 trillion mark, surpassing credit card debt and auto loan debt, and grew by $300 billion between the third quarter of 2008 and the first quarter of 2012 (The Consumer Financial Protection Bureau);

• At the same time, state and local support for higher education, measured in inflation-adjusted dollars per student, reached its lowest point in 25 years in 2011 (The State Higher Education Executive Officers Association).

 
Well-meaning (and well-educated) Americans carry an enormous debt-load stemming from higher education. Many are weighed down for decades by this financial burden, delaying the purchase of a home, starting a family, even marriage. Those particularly hard-hit by the recession and other life circumstances have sought relief through bankruptcy. But since 1976, that avenue is closed for student debt; it can no longer be discharged through bankruptcy unless very strict requirements for “certainty of hopelessness” are met.

The threat to individuals – and to the nation’s economy – is very real. Your company can be part of the solution! The benefits of a Corporate 529 Plan extend beyond your valued employees and their families, to your organization. By adding this essential programto your benefits package, you will demonstrate that your company values education and is invested in the next generation.

June 19, 2013 / 0 Comments

“Old-School Benefit for a New…”

brooklyn-1920x700
“People really want to allow their children, their grandchildren, and other important people in their lives the opportunity to attend college. But with college costs increasing at a faster rate than inflation, it gets tougher for them to do that.” -Winnie Sun

June 18, 2013 / 0 Comments

Who We Are

About the Campaign

 

There is a crisis in the U.S. It not only affects us, but the well-being of generations to come. In today’s global economy, getting a job and sustaining a household without a college degree is extremely difficult. There is a “Perfect Storm” effect, though, of swelling education debt coupled with rapidly contracting government aid for education. Many American families can potentially face financial ruin because they choose to educate themselves and their children beyond high school. Others forgo college, because of the staggering costs and shut out most meaningful and lucrative job opportunities.

Campaign for Next Generation Employees was founded by Sun Group Wealth Partners to address this crisis. All businesses, specifically our country’s largest employers, the Fortune 500 companies, can be part of reversing this negative trend by establishing a corporate-sponsored 529 plan for their employees. In most cases it is free, or of a minimal cost to the business.

 

Some Benefits of a 529 Plan

 

Spend Little to Nothing: For companies over 100 employees, a 529 plan is free and can help to:

Attract top talent in a competitive hiring market

Foster a work culture which views employees holistically as part of a family

Encourage better performance

Enjoy greater retention and loyalty

Earn the respect of tomorrow’s leaders by contributing to their higher education

 

Staggering Facts about College Costs

 

To the CEO’s of the Fortune 500, can you imagine not educating your own children past high school? Should your employees feel any differently about their own families?

People with college degrees earn more than $1,000,000 more over a lifetime than those who do not. Sadly, a diploma often comes with a staggering price tag; most graduates average $25,000 in loans. Student debt has ballooned to the $1 trillion dollar mark,1 eclipsing both credit card and auto loan debt. Conversely, state and local support for higher education reached its lowest point in 25 years in 2011.

 

What is a Corporate 529 Plan?

 

A 529 plan allows employees to contribute after-tax dollars to their account. The account grows free from federal income taxes and as long as the money is withdrawn to pay for qualified school expenses, it remains federal tax free. This is a vehicle for your employees to fund the education of themselves, their children, grandchildren and beyond. Setting up a 529 plan for companies over 100 employees is free. For companies who choose to generously offer a matching program, they will reap even more rewards, in terms of employee skill level, retention and attracting top talent in a competitive job market.

 

Winnie Sun, Founder of Campaign for Next Generation Employees

 
Winnie

Winnie Sun is Founding Partner of Sun Group Wealth Partners, a trusted financial consulting firm providing financial planning services to small business owners, senior executives and established families. Also a dedicated mother of two, Ms. Sun was aware of the pressure and fear of college planning for her own children and that the 529 plan was a clear choice for that financial and emotional stress. She set up plans for her own children, for many of her clients.

Knowing that corporate 529 plans could help solve the student debt epidemic in our country, Ms. Sun took her message from local to national and founded the Campaign for Next Generation Employees. It is her philosophy that like 401 (k) plans, our nation’s largest employers need to include 529 plans in their benefits package.

With more than 13 years of experience in the financial services industry, Winnie is frequently featured as a “top advisor” speaker at national industry events, and has been quoted in numerous publications including AOL Finance, USA Today, Yahoo! Finance, OnWallstreet Magazine, Financial Planning Magazine and more.

Read Winnie Sun’s full bio here.


 

Contact the Campaign

 

For a complimentary analysis of your company’s ability to sponsor a 529 plan, please email campaign@corporate529.com or call (800) 213-5888.

 

downloadfactsheet

 
 
12013 The Consumer Financial Protection Bureau
 
 

Securities offered through LPL Financial, member FINRA/SIPC.
Investment advice offered through Sun Group Wealth Partners, Ltd., a registered investment advisor and a separate entity from LPL Financial.
June 16, 2013 / 0 Comments

Meet the Founder

winniesmall

Winnie Sun

Wealth Manager/Education Advocate

Winnie Sun is the Managing Director and Founding Partner of Sun Group Wealth Partners, a trusted independent wealth management firm providing financial planning services to business owners, senior executives and established families throughout the West Coast, with a particular focus on professionals and entrepreneurs within the media and entertainment industries. Sun focuses on creatively customizing portfolios for its clients and specializes in multigenerational wealth plans.

Her dedication to holistic wealth management—customizing plans not merely for the individual—but often for the generations that follow, was the inspiration for founding the Campaign for Next Generation Employees.

The Campaign’s mission is to encourage our nation’s largest employers, namely the Fortune 500 companies, to fulfill their social responsibilities to helping to educate the next generation of Americans for gainful employment and offer corporate sponsored 529 plans for their employees. As college costs have swelled and general education funding has contracted, many American families are unable to send their children to college, or if they do, face financial ruin and bankruptcy because of staggering tuition costs. The solution lies with our nation’s largest businesses, which by adding this free and essential benefit to their employees, can ease the burden of university costs, provide a safe and structured method for planning for college, enhance employee loyalty and help build a healthy economy for themselves and the next generation of American workers. With more than a decade of experience in the financial services industry, Winnie is frequently featured as a “top advisor” speaker at national industry events and has been quoted in publications including AOL Finance, USA Today, Yahoo! Finance, OnWallstreet Magazine, Financial Planning Magazine, FA Magazine, AdvisorOne Magazine, GreersOC.com, the Sacramento Bee, and many more.

Winnie was previously First Vice President of Wealth Management, Senior Investment Management Specialist, and Lead Financial Advisor for the Sun Group at Morgan Stanley Smith Barney. Her exemplary team was a premier leader in managing client portfolios and providing both exceptional service and returns. Winnie began her investment advisory practice with Salomon Smith Barney when she was just 25 years old. She was awarded their highest honors for success with her membership in the elite Blue Chip Council (2001-2004), and President’s Council throughout her tenure. Winnie was also an advising member of the Smith Barney Asian Advisory Council. As an independent wealth advisor and LPL financial planner, Winnie is regularly called upon to educate large corporate and nonprofit groups on planning strategies. Winnie has also been honored with invitations to the Barron’s Winner’s Circle for Top Women Financial Advisors beginning in 2006 – 2012.

Prior to entering the financial planning industry Winnie was an entrepreneur in the media sector. She owned and operated CH Entertainment, a Los Angeles production company, with clients including America’s Funniest Home Videos, Jeopardy!, Wheel of Fortune and Judge Judy. Her experience as an executive gave her additional insight into the investment needs of business owners, large and small, and their families.

Winnie earned her degree in Political Science from University of California Los Angeles. She resides in Irvine, California with her husband and two young children.

Securities offered through LPL Financial, member FINRA/SIPC.
Investment advice offered through Sun Group Wealth Partners, Ltd., a registered investment advisor and a separate entity from LPL Financial.
June 15, 2013 / 0 Comments

A 529 Education Savings Plan

Add Value to Your Employee Benefits Package with a
529 Education Savings Plan

 

A 529 Education Savings Plan with direct deposit is a voluntary benefit option that creates measurable value for you and your employees.

 

You Benefit

No Cost to You as an Employer
Few opportunities exist today to enhance your current benefits package without increasing your budget.

 

Free Employee Education Meetings
Sun Group Wealth Partners will assist with plan setup and conduct Employee Education and Enrollment meetings for free. We can also provide the following communication templates and resources: sample employee announcements, sample website and email communications and forms, employee information and enrollment kits, and new hire packages. We’re also happy to attend Education or Benefits Fairs to introduce the benefit to your employees.

 

Choose Among Professional Money Managers
Sun Group Wealth Partners provides you access to a selection of professional money managers to choose among to manage plan assets and administrative functions.
 

No Form 5500 or Plan Testing
Unlike a corporate retirement plan, there is no Form 5500 to maintain and no compliance testing or other time-consuming requirements that impact your HR department. The plan’s professional money manager is responsible for all plan administration and for generating account statements.

 

No Payroll Change or Reporting Requirements
Account contributions are made on an after-tax basis and have no impact on W-2 or other reporting. Payroll Direct Deposit set up is a simple three step process handled by the employee and conforms to your standard procedure for employee payroll deposits to checking or savings accounts. Employees set up their own accounts and select all account options online.

 

Your Employees Benefit

 

Tax Advantaged College Savings
Tax advantages savings combine with the ease of automated payroll deductions to make 529 Education Savings Plans a smart and easy way for parents or grandparents to save for a child’s education.

 

Continuing Education for Adults
Employees can use the plan to save for their own higher education or continuing education costs. Fields where individuals may benefit from tax advantaged continuing education savings include:

 

Accountants – CPA’s
Teachers and Professors
School Administrators

Engineers
Architects
Healthcare Professionals

Lawyers
IT Professionals
Employer Services


 

Sun Group Wealth Partners Makes it Easy to Get Started Today

Sun Group Wealth Partners will meet with you to help you understand how the plan works, providing the information and resources you and your HR team require to quickly and easily establish this important benefit for your employees. Contact Sun Group Wealth Partners at (800) 213-5888 for more information or to schedule a meeting.

Learn more about us at www.sungroupwp.com.

 

You should consider a 529 Plan’s fees and expenses such as administrative fees, enrollment fees, annual maintenance fees, sales charges, and underlying fund expenses, which will fluctuate depending on the 529 Plan invested in and the investments chosen within the plan. Securities offered through LPL Financial, member FINRA/SIPC.
Investment advice offered through Sun Group Wealth Partners, Ltd., a registered investment advisor and a separate entity from LPL Financial.