WrapManager's Wealth Management Blog
When life changes, we can help you thoughtfully respond.

Doug Hutchinson

CFA®, Director of Research and Trading

Recent Posts

Evaluating the Most Efficient Way to Save for a College Education – Doug’s Quiz Corner

Posted by Doug Hutchinson | CFA®, Director of Research and Trading

August 17, 2018

What Are the Advantages of Using a Roth IRA vs. traditional IRA vs. a 529 Plan When Saving for College Costs?

Consider this Scenario:

Your friends Dan and Ashley have a son who will start college in 7 years. They would like to save some money for his college fund, but they are unsure about the best way to do so.

Right now they have $10,000 in cash set aside for this purpose. Over the next few years, they’d like to continue saving more money for his college education.

To make the most of what they’ve already saved, they’re considering putting the $10,000 into a 529 plan, into a traditional IRA ($5,000 into Dan’s and $5,000 into Ashley’s), into a Roth IRA ($5,000 into Dan’s and $5,000 into Ashley’s) or doing some combination of these options.

Assume that Dan and Ashley will receive a full state tax deduction on a $10,000 contribution into a 529 plan. Also assume that they meet eligibility requirements to contribute $5,000 each into their traditional IRAs and/or Roth IRAs.

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529 Plans Doug's Quiz Corner

Is it Better to Save for Retirement or Pay Off Student Loans? – Doug’s Quiz Corner

July 20, 2018
Determining Priorities When Saving for Retirement and Paying Off Student Debt Consider this Scenario: Your friend Stanley has recently ... [+] Read More

Performance Reporting: Does It Really Matter?

July 10, 2018
When you’re validating a money manager recommendation, chances are high that you’re looking for information regarding the managers ... [+] Read More

Introducing the WrapManager SAIRSHA Global All Cap ESG Portfolio

June 19, 2018
Some investors wish to align their personal values with their investment portfolio, but there have traditionally been several stumbling ... [+] Read More

How Does a Stock Split Impact the Cost Basis of Shares? – Doug’s Quiz Corner

June 15, 2018
Understanding the Cost Basis Impact of Stock Splits & Reverse Stock Splits Consider this Scenario Your friend Bill owns a stock that just ... [+] Read More

Are Stocks Attractively Valued?

May 22, 2018
Over the past couple of years, the S&P 500 Forward P/E ratio has been above its 25-year average. This has led some market commentators to ... [+] Read More

How Does Exchange-Rate Risk Impact the Purchase and Coupon Payments of Foreign Bonds? – Doug’s Quiz Corner

May 18, 2018
Tackling Currency Risk When Purchasing Foreign Bonds Consider this Scenario Your friend Lucy is a US resident who bought a British bond at ... [+] Read More

Should You Still Own REITs in a Rising Interest Rate Environment?

May 8, 2018
When interest rates spiked in early 2018, income related investments such as Real Estate Investment Trusts (REITs) experienced a sell off. ... [+] Read More

Sell in May and Go Away?

April 24, 2018
With the month of May approaching, it’s the time of year when we’re reminded of the old Wall Street saying, “sell in May and go away.” In ... [+] Read More

Understanding How the U.S. Taxes Foreign Dividend Payments: Doug’s Quiz Corner

April 13, 2018
How Do Tax Credits and Tax Deductions Work for Foreign Dividend Payments? Your friend Emily made an investment in the stock of a company ... [+] Read More