How exactly will my money be invested over time through U‑Nest?

U‑Nest’s Invesco Rhode Island 529 Education Savings plan automatically places your money in an optimal risk/reward investment portfolio based on your child’s age and your time frame. Your investment portfolio will be rebalanced automatically each year based on your child's age to achieve the most suitable asset allocation and reduce the investment risk as your child approaches the time they will need to use the money to pay for their education. The age-based portfolio within the Invesco Rhode Island 529 Education Savings plan are primarily invested in low-cost investments called ETFs. You have an ability to monitor your asset allocation from your U‑Nest app.

How does U‑Nest select the best 529 plan for me to invest in?

To identify the optimal 529 plan to use for your child, the team of financial experts at U‑Nest looked at hundred of possible 529 plans from various financial institutions and State providers and performed a rigorous analysis weighting the following key plan characteristics: Historical Returns, Stability of the Plan Provider, Low Expense Ratios and Fees, Automatic Electronic Monthly Investment, and Availability to Tailor Plan Based on Child’s Age.

Based on this analysis we selected CollegeBound Rhode Island plan as the best investment option. The plan is managed by Invesco, which is one of the top investment management firms in the United States. Invesco has over 80 years history and $988 billion in assets under management. To learn more about Invesco, please visit their website at https://www.invesco.com

How much can be contributed to 529 plan each year?

Each parent can contribute up to $15,000 a year ($30,000 per couple) towards their child's plan as of 2018 to qualify for the annual federal gift tax exclusion.

If you would like to contribute more, you can superfund the next 5 years to accelerate up to $75,000 per parent ($150,000 per couple) using the option of one-time deposit.

However, we recommend you to initiate a monthly plan and contribute to your child’s account regularly and consistently to avoid investing at an unfavorable time.

What does tax-free growth mean as it relates to the 529 plan?

  • Investment earnings in a 529 plan compound on a tax-deferred basis
  • Withdrawals that are used for qualifying educational expenses are federal tax-free.

How many 529 plans can I have?

There's no set limit on the number of 529 accounts that can be opened for any particular beneficiary. If you plan to have more than one 529 plan for your child, you should just remember to stay within the annual $15,000 limit for the gift tax exclusion purposes. In addition, you can always decide to consolidate multiple 529 plans into one by doing a 529 plan rollover, which is considered a non-taxable event.

What happens to my money after I open an account with U‑Nest?

We select the best portfolio of stocks and bonds to make sure that your money is invested in the smartest possible way given the age of your child (and when they expect to need the money for their education) and the expected risks and returns of stocks, bonds, and other investment vehicles. Furthermore, your college savings account is constantly optimized behind the scenes to achieve the most optimal asset allocation as your child becomes older and approaches college.

We have selected Invesco’s Rhode Island 529 plan as the best investment option based on a thorough financial analysis. This plan has low fees, competitive returns, and great investment options. Invesco’s CollegeBound 529 is recognized by Morningstar® as a highly rated advisor-sold 529 plan.

How will my money be invested?

U-Nest will recommend the optimal investment portfolio based on your child’s age and your time frame. In addition, your investment portfolio will be rebalanced automatically, based on your child's age, to achieve the most suitable asset allocation and reduce the investment risk as your child approaches college. The age-based portfolios that we recommend are invested in low cost investments (ETFs).

What types of expenses or fees are involved with the plan?

Unlike traditional financial advisors that can cost you hundreds of dollars or have hidden brokerage commissions, our fee structure is very transparent. It’s only $3 per month. You can refer to the Program Description for more information about underlying management fees and fund expenses for CollegeBound 529.

What can happen to my investments in case of market downturn?

At U-Nest, security of your investments and risk management are our top priority. Our investment philosophy includes three main principles: discipline, consistency, and long term focus. Although your investments may potentially lose value, this risk is significantly reduced if you’re invested for a long term.

As fiduciaries, we always keep your interests in mind and recommend asset allocations that are sufficiently diversified and have moderate risk profiles. Also, the allocations are regularly rebalanced to gradually become more conservative as the expected date of college enrollment nears. With regular monthly investments, we ensure that you invest in different points of the market, so your investment returns are smoothed out.

How do I make withdrawals from this fund to pay for college?

If you are paying for tuition, you can set it up so the funds transfer directly to the school, eliminating the need for a formal withdrawal. For other educational expenses, three business days may be necessary to withdraw or transfer into your account. After that, you are free to spend the money tax-free on qualified expenses. Simply select “Transfer Funds” from the menu on your college fund details page to transfer funds to your bank account or directly to the school of your choice.

What is considered a qualified higher education expense?

Qualified higher education expenses generally include:

  • Tuition
  • Textbooks, supplies and equipment
  • Mandatory fees
  • Schools K-12 (up to $10,000 a year)
  • Computer or peripheral equipment
  • Computer software
  • Internet access and related services
  • Room and board
  • Special needs services for a beneficiary with special needs

Please note: Paying off a student loan is not considered a qualified expense.

Check out Questions page to find answers to the most common questions!