Education plans with a 529 Account can be modeled with inStream using the Account Withdrawal feature.
As a default, inStream uses funds to meet your goals in the order of: income, taxable accounts, tax deferred accounts, and then tax exempt accounts. However, for something like an education plan, you may want to modify this order. This is where account withdrawals come in.
First, select your client, click plans, and select “Create New Plan”.
Next, add an education goal, and fill out the information as you would with any other goal. Remember to take note of the annual amount total and start/end dates used for the goal, as you will need to use these again later.
Next, we arrive at the “Accounts Section”. If you have an integration with us you likely already have some accounts loaded up. I don’t have a 529 account, so I will go ahead and create a new one.
After selecting/creating your account, click on the “Add Withdrawal” button. This will open the withdrawal drop down. This is where you need to enter the information from your goal. Enter the amount of the goal in the “New Withdrawal” section, and ensure that the years of withdrawal line up with the years for the goal.
If your withdrawal is not enough to cover the goal, inStream will max out the 529 account, then defer to the order mentioned earlier (income, taxable, tax deferred, then tax exempt). If for some reason your withdrawal was more than the goal, inStream will move these excess withdrawal funds into a taxable account.
From here, you can continue walking through the plan wizard as with any other plan by selecting the allocation, adding any income, setting taxes, as well as plan tracking.
For more information, you can check out our main article on Account Specific Withdrawals. You can also reach our support team anytime by sending us a quick message at email@example.com.