AICPA Personal Financial Planning (PFP) Podcast

Episode: Education Funding {PFP Section}

Date: January 28, 2025
Host: Kari Sinnett, AICPA PFP Division
Guest: Dr. Ross Riskin, Chief Learning Officer, Investments & Wealth Institute

Episode Overview

This episode features a deep dive into education funding within the context of personal financial planning. Host Kari Sinnett and guest Dr. Ross Riskin discuss the complexity and importance of education planning, especially for high-income and high-net-worth families. The episode covers strategies, decision points, and conversations surrounding vehicles like 529 plans, multi-generational planning, tax implications, college savings vehicles, and how these considerations interact with retirement and legacy goals.

Key Discussion Points & Insights

1. The Value and Complexity of Education Planning

Timestamps: 02:20–04:07

• Demand for education planning is high, yet significant knowledge gaps exist among advisors.
• Education planning is unique in spanning multiple generations — advisors work with parents, children, and sometimes grandparents or extended family.
• Early exposure to next-generation clients and potential for "upstream" opportunities (grandparents) is a key benefit.

“It’s really one of the few ways that provides an opportunity to really work across generations.”
— Dr. Ross Riskin [02:35]

2. Understanding Who’s Involved and the Importance of Clarity

Timestamps: 04:07–06:23

• Advisors should clarify who participates in funding (parents, grandparents, relatives).
• Family assumptions about contributions can differ dramatically; inflation and timing are critical factors.
• Documenting intentions helps align the plan and manage expectations.

“Nana has a good heart. But let’s, let’s put some things down so we know exactly what that means.”
— Kari Sinnett [06:36]

3. Selecting the Right Savings Vehicles: Key Factors

Timestamps: 06:46–08:43

Dr. Riskin outlines four criteria to consider when choosing education savings vehicles:

• Operational Flexibility: Who owns/controls, how to fund/distribute, ease of changes.
• Investment Flexibility: Range and freedom of investment choices.
• Tax Efficiency: Contributions, growth, and qualified-distribution rules.
• Financial Aid Efficiency: How assets are counted in aid formulas (student vs. parent vs. not at all).

“We like to think about four different things. The first is operational flexibility…”
— Dr. Ross Riskin [06:54]

4. Choosing and Maximizing 529 Plans

Timestamps: 08:43–11:50

• State selection (in-state vs. out-of-state) impacts potential deductions and overall value.
• Amount contributed and state tax treatment should be factored into plan choice.
• The value of tax-free growth increases with a longer investment horizon; closer to college, the state deduction can outweigh growth.

“If you have somebody that’s looking to put in...$50,000 but they’re only getting a state income tax deduction of $4,000, well, that’s not really a driving factor. It provides some benefit, but not a lot.”
— Dr. Ross Riskin [09:35]

5. Managing Leftover Funds & Multi-Generational Strategies

Timestamps: 11:50–14:08

• 529 plans can be legacy vehicles; changing beneficiaries across children, grandchildren, or other relatives is possible and powerful.
• Must manage tax and transfer issues (especially when shifting across generations).
• Other options: repay student loans ($10k lifetime limit per beneficiary/sibling), roll excess to Roth IRAs for beneficiaries, or strategic withdrawals.

“These 529 plans...are one of the best legacy planning vehicles…you fund it initially and...you can change the beneficiary to another child or grandchild…”
— Dr. Ross Riskin [11:53]

6. Contribution Limits, Trusts, and Large Accounts

Timestamps: 14:40–16:23

• High maximums: e.g., $575,000 contribution cap in some states (growth can exceed this).
• Multiple 529 plans can be used in different states for one beneficiary.
• Trust ownership plus GST exemption can optimize multigenerational funding.

7. Balancing Retirement and Education Funding

Timestamps: 16:23–18:22

• Saving for retirement should take priority, but clients often do the opposite.
• Roth rollovers from 529 excess funds are promising but require complex consideration (e.g., rolling back to parents).
• Student motivation, academic goals, and financial fit must factor into conversations — not all students or parents should fund the same way.

“Saving for retirement needs to take priority over saving for college. Yet clients operate and act in the total opposite behavior of that many times.”
— Dr. Ross Riskin [16:36]

8. Comprehensive Planning & Client Conversations

Timestamps: 18:22–22:56

• Family philosophy on education (public vs. private, K–12 expenses) impacts planning.
• Education funding is a gateway to multi-generational relationships and true comprehensive planning.

“Education planning is one of the best ways to deliver...truly comprehensive planning.”
— Dr. Ross Riskin [19:50]

9. Lesser-Known 529 Features and State Nuances

Timestamps: 20:12–22:56

• 529s can be used for $10k/year K–12 tuition and $10k/lifetime student loan repayment (per beneficiary and sibling).
• State conformity to federal rules varies—failures here can trigger unexpected taxes or recapture of prior deductions.

“The reality is not every state conforms to those federal laws…Paying back a tax deduction they maybe got five or 10 years ago because they didn’t understand the compliance issues there.”
— Dr. Ross Riskin [22:05]

10. Getting Started: Building Education Planning Expertise

Timestamps: 22:56–26:54

• Advisors should consume AICPA PFP content, guides, and pursue designations like Certified College Financial Consultant (AICCFC).
• Distribution planning is a critical advisor value-add: which account to draw from, sequencing, coordinating with tax credits (e.g., American Opportunity Tax Credit), and tax-year alignment.

“That’s where you as a CPA advisor can really add value is now it’s time to pay the bill. Where do we take money from first and how do we do that?”
— Dr. Ross Riskin [24:26]

11. Proactive Communication and Client Engagement

Timestamps: 25:51–28:45

• Advisors should regularly communicate about education planning topics (FAFSA, award letters, new laws), even if not directly relevant to show engagement and build trust.
• Personalized updates demonstrate to clients that you are proactive and think about their families’ futures.

“There’s so much value in saying, hey, you know what, I just went to this conference ... and I’m taking a look at that for you.”
— Dr. Ross Riskin [26:24]

12. Investment Planning for College-Age Years

Timestamps: 28:45–31:50

• 529 investment allocations need review as the child approaches and enters college.
• Age-based portfolios may not match revised timelines, and risk exposure could be mismatched; safe, guaranteed principal options may be optimal in distribution years.

“I urge people that if you have clients and they are in school right now...go look at those investment allocations there, see what the guaranteed principal options are returning.”
— Dr. Ross Riskin [31:16]

13. Advanced Tips and the Changing Financial Aid Landscape

Timestamps: 31:50–34:43

• High-income families may now qualify for aid as school costs rise; more must understand financial aid formulas and timing.
• The “base year” for financial aid assessment is the spring semester of the student’s sophomore year in high school—early planning is critical.

“It’s the spring semester of the student’s sophomore year in high school...that will basically dictate what you’re able to receive from a need-based position for the next four years…”
— Dr. Ross Riskin [32:54]

• Student loan “forgiveness” programs can shift the calculus—sometimes it’s better not to pay off all costs directly.

Notable Quotes & Memorable Moments

• "It continues to be one of those areas that the demand for it is high and there really still is a big knowledge gap and a service gap..."
  — Dr. Ross Riskin [02:25]

• "These 529 plans...are one of the best legacy planning vehicles."
  — Dr. Ross Riskin [11:53]

• “That’s where you as a CPA advisor can really add value: now it’s time to pay the bill. Where do we take money from first and how do we do that?”
  — Dr. Ross Riskin [24:26]

• “Parents usually have their different philosophies...But...they all want to do what’s best for their own kids. And then...it gets you another phone call, another meeting with another interested party who could be a client ... now you’re working with three generations for one family.”
  — Dr. Ross Riskin [18:22]

• “Get educated about education planning.”
  — Dr. Ross Riskin [31:50]

Suggested Action Items for Listeners

• Review and understand the different education funding vehicles and how they interplay for your client base.
• Initiate conversations with clients about who is involved, what assets are available, and their philosophy of education funding.
• Review 529 investment allocations as students approach/enroll in college to ensure capital preservation.
• Stay current on state-specific rules relating to tax benefits and qualified education expenses.
• Build habit of proactive communication—share relevant updates, even when not immediately actionable, to build trust and demonstrate ongoing care.
• Explore advanced planning techniques for high-income clients, including legacy considerations and optimizing aid eligibility.

Useful Timestamps for Key Topics

• Why education planning is vital: [02:20–03:45]
• Four key factors in savings vehicle selection: [06:46–08:43]
• State tax benefit discussions: [08:55–10:50]
• Handling leftover 529 funds and multi-generational approaches: [11:04–14:08]
• Trusts and advanced funding strategies: [14:40–16:23]
• Retirement vs. college saving priorities: [16:23–18:22]
• Client engagement and expanding relationships: [18:22–22:56]
• 529s for K-12 and student loan repayment: [20:12–22:56]
• Advisor education and distribution planning: [22:56–26:54]
• Proactive client communications: [25:51–28:45]
• Investing in 529s during college withdrawals: [28:45–31:50]
• Financial aid planning timeline: [31:50–34:43]

This episode is an essential listen for financial planners looking to deepen their education funding expertise and foster long-term, cross-generational client relationships. Dr. Ross Riskin provides practical strategies, timely warnings, and actionable advice to elevate your role as a trusted advisor in education planning.