As I sit here on 529 Day (5/29/2018), I thought I would write a refresher on how we can save for our kids’ future. 529 Day is college savings’ nerdy equivalent of “May the Fourth” (5/4) and Pi Day (3/14) and reminds us to put some money away for our kids’ education.  But, when it comes to saving for children, there is no “one size fits all” solution. (Note: this is just a quick overview of the different options, please consult your CFS* Financial Advisor for more information)

529 plans are college savings accounts that are named after the IRS code that created them.  These accounts allow us to invest money and if the proceeds are used for qualified educational expenses, the growth is tax-free. Qualified expenses are “expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board at an eligible education institution”** Importantly, the Tax Cut and Jobs Act of 2017 expanded the 529 uses to include tuition at elementary and secondary schools (up to $10,000).

Custodial accounts, or UTMA accounts, are another way to save for children. These are accounts that are owned by the child and administered by a custodian. The custodian decides how the funds are to be invested. Contributions are an immediately vested, irrevocable gift. Neither the custodian, nor the donor, can take money deposited into a UTMA back for any reason. The funds must be handed over to the child on the age of maturity, which can be specified at the time of the gift up to a certain maximum age or else defaults to the state law (18 in a few states, 21 in almost all states, 25 in a handful of states). The advantage of UTMA’s is that reinvested dividends and the account growth are tax-free until the child’s annual unearned income exceeds $950.

Here in Washington, we also have the GET program (Guaranteed Education Tuition). This is the pre-paid tuition plan that is run through the state. In this program, you purchase units at a price determined by the state that can be used to pay tuition and other qualified expenses in the future. 100 units = one year of tuition at a Washington state public institution. The GET program has experienced significant turmoil over the last decade. From being underfunded after the Great Recession, to being overfunded today. Regarding the latter, the GET program is getting ready to offer a windfall of sorts. While the current value of a unit is $103.86, because of the fund surplus, unit holders who choose to roll their money into the newly established WA state 529 (Dream Ahead College Investment Plan) could get as much as $144/unit.^

Finally, a not uncommon solution is to open an account in your name and simply earmark the funds for your child. This may sound simple and obvious, but it does have its advantages. Mainly, you have total control of this account. You do not have to use it for anything specific and in fact do not even need to give it to the child if you change your mind. Unlike money which is put into a custodial account (which are irrevocable gifts), you can take back any or all the money you put in this earmarked account. The downside is that there are no tax benefits. The account is treated like any of your other accounts.

Saving for your children is important. That being said, you may not need to save for four full years of college or their down payment on a house. But, if we can help our kids make that transition into self-sufficiency, I think it’s a good cause. What we do today can not only help them financially, but also show them the benefits of saving and investing.



**There are fees associated with 529 savings plans. Investments in 529s involve investment risks. You should consider your financial needs, goals, and risk tolerance prior to investing. More information about 529 plans can be found in the issuer’s official statement or plan disclosure document which should be read carefully prior to investing. Most 529 plans are sponsored and administered by states. State tax benefits vary among the states and some offer residents additional tax benefits if they invest in their own state plan. Consult a qualified tax professional for more information.



*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Verity Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.


Gavin Chinn, CUSO Financial Services Advisor at Verity

Check the background of this investment professional on FINRA’s BrokerCheck.

A Financial Advisor registered through CUSO Financial Services, L.P., Gavin has 25 years of experience as an advisor in the Puget Sound area.

“I believe every client is unique and deserving of a personalized financial plan that will help them reach their individual financial goals. Before I make any recommendations, I like to get to know my clients. By asking the right questions, and developing an honest, trusting relationship, I can really get a sense of what’s going to work best for them.”

Gavin graduated from the University of Washington with a BA in Business Administration and started his financial career with US Bank in the Investment Department. Prior to joining Verity in 2006, he spent eight years with Piper Jaffray.

So what is Gavin’s vision for his dream retirement?

“My dream retirement would be absolutely worry free: financially, emotionally, and in every aspect of life. My finances would be in order so expenses for travel, luxuries, and gifts for the kids, grandkids, and great-grandkids would be taken care of. My kids would be financially sound, so I would be confident in their prosperity. This would give me the freedom to travel and play and do whatever it is I want to do.”

When Gavin’s not working, he enjoys spending time with friends and family, watching Husky football and taking weekend trips around the Northwest.

Gavin is registered to transact securities business in the states of AZ, CA, CO, FL, HI, ID, IL, KS, MN, NV, NY, OR, UT, VA and WA.

*Non-deposit investment products and services are offered through CUSO Financial Services, LP (“CUSO Financial”) (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CUSO Financial. Verity Credit Union has contracted with CUSO Financial to make non-deposit investment products and services available to credit union members. Atria Wealth Solutions, Inc. (“Atria”) is not a broker-dealer or Registered Investment Advisor and does not provide advice. CUSO Financial is a subsidiary of Atria.

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