Education Planning at Petrichor Wealth Management

How much does education planning service cost at Petrichor Wealth Management?

Education planning is typically included as part of our comprehensive wealth management service for existing clients. For standalone education planning, we offer project-based engagements starting at $1,500-$3,000 depending on complexity, or ongoing planning as part of our annual retainer relationships which range from $3,000-$10,000+ annually based on asset levels and planning needs. Initial consultations are complimentary to determine the best service model for your situation.

When should I start education planning for my children?

The earlier you start, the more time your savings have to compound. Ideally, families should begin education planning when children are born or in early childhood to maximize the 18-year savings runway. However, it's never too late to start — even families with high schoolers can benefit from financial aid optimization, tax-efficient savings strategies, and realistic funding projections. We work with families at every stage, from newborns through college-bound students.

What happens during the first education planning session?

Your first session begins with a comprehensive discussion of your education goals: number of children, type of schools you're considering (public vs. private, in-state vs. out-of-state), timeline until college, and current savings. We'll review your overall financial picture to understand how education funding fits with retirement, home ownership, and other priorities. You'll receive a preliminary analysis of projected education costs, recommended monthly savings targets, and 529 plan options suitable for your state and situation. Most initial sessions last 60-90 minutes and result in a clear action plan.

How do 529 plans affect financial aid eligibility?

529 plans owned by parents are treated as parental assets on the FAFSA (Free Application for Federal Student Aid) and assessed at a maximum rate of 5.64%, which is more favorable than student-owned assets (assessed at 20%). We help families structure 529 ownership strategically — for example, grandparent-owned 529s aren't reported on FAFSA under current rules, though distributions may count as student income. Our planning includes modeling financial aid scenarios and identifying strategies to maximize need-based aid when applicable while still building meaningful education savings.

What if my child doesn't go to college or gets a scholarship?

529 plans offer multiple flexibility options. Funds can be transferred to another family member (siblings, cousins, even yourself for graduate school) without penalty. Up to $10,000 can be used for K-12 tuition per year. Starting in 2024, up to $35,000 of unused 529 funds can be rolled into a Roth IRA for the beneficiary under certain conditions. If your child receives a scholarship, you can withdraw up to the scholarship amount from the 529 without the 10% penalty (though you'll pay income tax on earnings). We help families balance 529 contributions with other flexible savings vehicles to maintain optionality.

Which 529 plan should I choose?

The best 529 plan depends on your state's tax benefits, investment options, fees, and performance. Many states offer tax deductions or credits for contributions to their own state's plan, which can provide immediate returns of 5-7%. However, you're not required to use your state's plan, and sometimes out-of-state plans offer better investment options or lower fees. We evaluate your specific state's benefits, compare plan features and expenses, assess investment track records, and recommend the optimal plan (or combination of plans) for your situation.

How much should I be saving for college?

The answer depends on the type of school you're targeting, your timeline, current savings, and what percentage of costs you want to cover. As of 2024, average annual costs range from $11,000 for in-state public universities to $60,000+ for private institutions. We create customized projections using education inflation rates (historically 5-6% annually), your specific timeline, and realistic return assumptions. Many families aim to cover 50-75% of projected costs through savings, with the remainder coming from current income, student contributions, and potentially loans. We help you set achievable targets that don't compromise retirement security.

Can education planning help with private K-12 school costs?

Yes. While 529 plans were originally designed for college, the Tax Cuts and Jobs Act of 2017 expanded them to allow up to $10,000 per year in tax-free withdrawals for K-12 tuition at private, public, or religious schools. We help families strategize around private school funding, balancing current tuition payments with long-term college savings, evaluating whether 529 contributions make sense for near-term K-12 expenses, and exploring other education funding vehicles like Coverdell ESAs when appropriate. Our planning addresses your complete education funding timeline from kindergarten through graduate school.