College Planning: 529 College Savings Plans

Learn More about this State-Sponsored Investment Account for Educational Costs


As a parent, you want the very best future for your children – but what happens when that future comes at a substantial cost? If you dream of a private school college education for your kids, it just might.

For parents who are hoping to cover the partial or full costs of college, a 529 college savings plan may be a useful tool. Designed specifically for educational costs, a 529 plan is a state-sponsored investment account that offers many advantages. However, it is easy to make missteps with these plans that could cost you big down the road, so it’s important to learn all you can before starting one.

Understand Plan Variations

As with many other financial instruments, it often pays to shop around. All fifty states and the District of Columbia offer at least one 529 plan, and you are not necessarily limited to choosing your state’s plan. You will want to consider the differences among plans, especially in these categories:

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Taking Stock of Lump-Sum Investing vs. Dollar-Cost Averaging

Some investors favor a dollar-cost averaging (DCA) approach to deploying their investment capital. Unlike lump-sum investing, in which the full amount of available capital is invested up front, DCA spreads out investment contributions using installments over time. The appeal of DCA is the perception that it helps investors “diversify” the cost of entry into the market, buying shares at prices that fall somewhere between the highs and lows of a fluctuating market. So what are the implications of DCA for investors aiming to generate long-term wealth?
Let’s take the hypothetical example of an investor with $12,000 in cash earmarked for investment in stocks. Instead of buying $12,000 in stocks today, an investor going the DCA route buys $1,000 worth of stocks each month for the next 12 months. If the market increases in value each month during this period, the DCA investor will pay a higher price on average than if investing all up front. If the market decreases steadily over the next 12months, the opposite will be true.
While investors may focus on the prices paid for these installments, it’s important to remember that, unlike with the lump-sum approach, a meaningful portion of the investor's capital is remaining in cash rather than gaining exposure to the stock market. During the process of capital deployment in this hypothetical example, half of the investable assets on average are forfeiting the higher expected returns of the stock market. For investors with the goal of accumulating wealth, this is potentially a big opportunity cost.


This article originally appeared on Dimensional.com. PLEASE CLICK HERE TO READ THE ORIGINAL ARTICLE. 

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Bulls, Bears, and Long-Term Benefits of Stock Investing


Stock returns are volatile, but nearly a century of bull and bear markets shows that the good times have outshined the bad times.

  • From 1926 through March 31, 2020, the S&P 500 Index experienced 17 bear markets or a fall of at least 20% from a previous peak. The declines ranged from —21% to —80% across an average length of around 10 months.
  • On the upside, there were 17 bull markets or gains of at least 20% from a previous trough. They averaged 56 months in length, and advances ranged from 21% to 936%.
  • When the bull and bear markets are viewed together, it’s clear equities have rewarded disciplined investors.



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Are You Ready to Upsize?

Five Considerations Before You Purchase a Larger Home

A lot has been written and discussed over the years about the benefits of downsizing your home when you reach a certain point in your life, typically retirement or when your grown children move out. However, there are many people in a different phase who are currently facing the exact opposite scenario – upsizing.

As you contemplate upgrading your starter home, maybe your family is growing and requires more room, or you would simply like a more spacious floor plan, upsizing is a big step. The decision to purchase a larger home, and likely take on a larger mortgage payment, requires thoughtful consideration.

Below, we discuss five things you may want to think about as you make this important move.

1.    Understand ‘Why?’

People upsize their homes for a variety of reasons. You may want to upsize because you need more bedrooms for your growing family, you may be running out of storage space and in a desperate search for more, or you may have experienced a recent increase in your income and want to upgrade your lifestyle. Whatever the reason, make sure it is clearly defined. Ask yourself whether you are trying to achieve an intrinsic goal by upsizing, rather than an extrinsic one, in keeping up with the neighbors’ upgrades, for example.

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Retirement Planning for Millennials: A Complete Guide

Your Future  Is Closer Than You Think

Does your retirement feel like a lifetime away? If so, you are not alone. Many millennials are very focused on their careers, paying off student loans, and juggling a social life with growing family commitments.

These things are all important and deserve attention, but failing to put energy into retirement planning is a mistake that can cost you dearly in the not-so-distant future. Why? It’s all about the magic of compound interest. The longer your time horizon to save, the better chance investments have to earn interest upon interest; theoretically increasing at an exponential rate.  

With an eye toward maximizing compounding in your retirement planning strategy, here’s how to get started saving right now.

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Young Families and Estate Planning: Five Considerations for Parents

They are the conversations no parent wants to have, and yet they are incredibly consequential.

Six in ten adults don’t have a will in place. For couples with young children, a will designates a guardian to care for your children should you and your spouse pass away. Without a will, it is up to the courts to decide who will care for the children, and those decisions may not be the best for your family. It is also important to take the steps to ensure if they will be financially secure. Proper titling of assets and designations in the will can direct personal property exactly as you wish, so your children (and their caregivers) may never have to worry about a financial burden.

Again, these are difficult conversations to have, but planning ahead means you can ensure your wishes are met if the worst should happen, and you can begin by asking yourself five important questions.

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Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital.
Information provided in this blog is for educational purposes only and is not intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with own financial advisors, accountants, or attorneys regarding your individual circumstances as needed. No advice may be rendered by Arcadia unless a client service agreement is in place. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

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