Education Savings Accounts

RightCapital enables financial planning, done just right. That includes thinking about not just the clients, but also the client's children and their education. There are multiple methods to capture education savings plans in RightCapital.

Manually add a 529 Savings Card

Under the Profile > Savings tab, you can add a 529 savings card to indicate annual savings toward 529 accounts. Click 'Add Savings' and select '529', input the amount, duration, and make sure to assign the beneficiary.

Pro Tip

You can indicate 529 savings coming from outside the plan by using the 'Individual from outside of plan ' option from the 'Owner' drop-down menu:

You will see the contribution in the Retirement > Analysis > Cash Flow > Accounts tab, by selecting the 'addition to accounts' option.

Manually add a 529 account

If the client does not want to include a child in the planning process, but does still want a college savings account (either for an anticipated birth or for a current child for whom they would like to keep their date of birth and name private), they can add a 529 account on the Net Worth page.

To do so, click Add Account > Investment. From the drop-down menu, select 529 college savings plan.

Be sure to indicate the Child as the beneficiary to have the account accurately reflect in the Client's plan.

Use a child's 529 to analyze education savings coverage

Navigate to the Education tab in a client's portal to gain deeper insight into the client's preparedness for a child's education expenses.

Impact of Adding Children to Family Profile

During the initial setup, or from the client's profile, click Add Participant from the family page. Indicate that the new participant is a child, and input their date of birth.

This will automatically generate a college savings goal on the Goals page.

Under Profile > Goals you can also include a pre-college education goal to represent tuition to private schools. Should these pre-college education goals be funded through 529 accounts, note that the annual distributions will be capped at $10,000 per the SECURE Act.

The "Use 529 accounts to fund Pre-College Education goals" setting in the Gear Icon > Settings > Methodology tab will determine whether or not 529s are used to fund pre-college goals.

Anticipated college costs

College costs are used within the College Goal as a reference for advisors.

National average costs are from CollegeBoard.org published data. Specific college costs are taken from Department of Education published data. We plan to review the data on an annual basis.

After the initial data entry has been completed, savings can also be added directly to a proposed plan within the Retirement > Analysis module. This allows for an easy comparison of scenarios with different contributions. For more information on adding savings into the Retirement > Analysis module click here.

Note on 'Other Family Members'

By default, only the client, co-client, children, and grandchildren can be selected as 529 beneficiaries. If you'd like to select an Other Family Member instead, navigate to the Profile > Family tab (or Step 1 of the initial six steps of data entry). Open the 'Other Family Member' card, and check the "Include for Education planning" box: