Category Archives: Virginia

Virginia Pre-Paid Tuition: What You Need to Know

Virginia offers a prepaid tuition program to residents looking to save for future college educational costs, called Virginia529 prePAID.  The plan allows you to prepay future tuition and mandatory fees for Virginia colleges or universities.  However, there are several catches that you must be aware of that make this college savings option somewhat tricky to plan around.

You can only open accounts during a limited enrollment period each year.  Either the account owner or beneficiary must be a Virginia resident when opening the account.  This is not a big hurdle, but it is something that you should know.

You purchase the credits in semester increments, and this is where things really start to get confusing.

  • First, you can only buy the credits from the child’s birth through the time they complete the ninth grade.  After the beneficiary has completed the ninth grade, you can no longer purchase any more prepaid tuition credits for them.
  • Next, when purchasing semester credits, you can purchase either Tier1 or Tier2 credits.  Tier1 credits cover one semester of tuition at a Virginia public four-year college, where Tier2 credits cover one semester of tuition at a Virginia two-year or community college.  Applying a Tier1 credit to a Tier2 school will cover more than a semester of tuition, while applying a Tier2 credit to a Tier1 school will cover less than a semester of tuition.
  • Furthermore, if you apply either Tier1 or Tier2 credits to an out-of-state college or a private college (even a Virginia private college), the credits do not necessarily transfer one-for-one and your pre-paid tuition might be worth less than what you thought it would be.

Those things, in our opinion, make planning around the Virginia pre-paid tuition plan very difficult.  Before the ninth grade, college planning is a distant goal.  Narrowing down college choices is something that probably very few people sit around and do with their 4th grader.  Knowing where that child will eventually decide to go to school, or even whether your family will still live in-state when that 4th grader eventually heads off to college, is a wild guess for most.  Even if your child loves one particular school, knowing whether they will eventually be able to make it into that school is a whole other issue.

The benefit to the plan, and its allure, is that you can lock in the future tuition and fee payments now so that you will not have to worry about whether tuition prices continue their rapid increase.  However, you should at least be aware of some of the potential pitfalls involved with the plan before jumping in.  For more information, visit the Virginia prePAID plan website, or feel free to contact us.

Tagged , ,

8 Things Every Parent Should Know About 529 College Savings Plans

We often are asked by parents (or grandparents) of young children about college savings plans.  529 college savings plans offer tax-advantaged ways to save for the various costs of higher education.  While these plans have a lot of name recognition, many people still have questions about the details.  Since it is the first day of school for most kids here in Virginia, it seemed an appropriate time for us to share these eight things you should know about 529 college savings plans:

  1. Earnings on 529s are tax-free, as are withdrawals, as long as you use the money for qualified educational expenses.  Qualified expenses include tuition and fees, books, room and board, supplies, and even computer-related expenses.
  2. There are no income restrictions to open and contribute to a 529 account.  Even high-income earners can open and fund college savings plans.
  3. The money in a 529 account can be used towards in-state or out-of-state schools, both public and private.
  4. The contribution amounts are very high: you can contribute up to $350,000 per beneficiary into a 529 account.  (Keep in mind that you will need to get a little deeper into gift tax rules if you intend to contribute more than $14,000 to a 529 account in any one calendar year.  You can do it, but you should know the rules first.)
  5. The beneficiary is portable.  If your child decides they want to do something else instead of going to college, you can name someone else the beneficiary (sibling, first cousin, grandparent, aunt, uncle, or yourself).  You do not need to decide on a new beneficiary the moment that your child decides not to go to college.  For instance, you could hold onto it and eventually name your grandchildren the beneficiaries.
  6. Charitable family members can contribute to an existing 529 account that you own or set up their own 529 and name your child as beneficiary.
  7. In Virginia, putting money into a 529 plan has the added bonus of providing a state tax deduction for contributions up to $4,000.  Thirty-three other states also offer state tax deductions for contributing to a 529.
  8. If your child gets a scholarship, you will not lose the money.  You can use the plan to cover expenses that the scholarship does not, such as books, room and board, or other supplies.  You can keep the plan open in case your child goes on to graduate school.  You can change the beneficiary and name another college-bound relative.  A final option would be to simply cash out the plan.  Doing so would subject you to income tax and a 10% penalty on the earnings.  If you were feeling generous, you could name your child the owner and let them cash it out at their (presumably) lower tax rate.

If you have questions, or are interested in finding out how to start a 529 plan, please let us know!

Tagged , ,

Korving & Company – Suffolk Small Business of the Year

We are very proud that Korving & Company has been named Suffolk Small Business of the Year by the Hampton Roads Chamber of Commerce (HRCC).

HRCC Suffolk SBOY award 2015

We were honored at a luncheon on Norfolk sponsored by the HRCC on June 12th. Pictures of the event can be found on our Facebook page.

Here is what Inside Business had to say about us:

Father-and-son duo Arie and Stephen Korving have more than four decades of experience in financial advising between the two of them.

Arie Korving entered the business in 1986, working for a global wealth management firm, and Stephen joined him at the firm in 2004, after working in institutional money management. Branching out to start Korving & Co. in 2010 gave them the opportunity to provide individualized financial advice to clients. Their purpose is managing money but putting people first is at the core of what they do.

“We know our clients,” Stephen said. “We manage money for them to help them achieve what it is they want.”
Today, they have clients in every stage and circumstance of life, from the widow in an assisted living facility to the corporate executive. The common denominator among clients is that they remain with Korving & Co. for a long time, some for over 20 years.

Because of Arie’s establishment in the industry and his ability to maintain relationships, they are not just nationwide but across countries, Stephen said. Given the nature of how they invest, long distance relationships with clients have never been an impediment.

“We are a family business that works with families,” Stephen said. “We do for our clients what we would do for our family members if they were in the clients’ situation.”

“We decided to run this business to help people achieve their goals and we want to do it in a highly ethical, highly transparent way,” Arie added.

It is this type of personalized guidance that has kept the company increasing at 15 percent to 20 percent per year, a rate that they want to continue to see as long as it provides the opportunity to work with people in a meaningful and impactful way.

This principle was further established during the market crashes of 2000 and 2008, after which the company decided to become totally independent of large investment firms, allowing them to provide service based on their clients’ needs.

“It really resonates with people when you can say let’s find what you really want to do rather than what the market wants to do,” Arie said. “That type of risk control is an important service we offer.”

Located in Suffolk, they are truly a small business by choice with only one other employee beside themselves on payroll. By staying small, they are able to grow in relationships and be involved in the community, Stephen said.
Arie recently published a book, “Before I Go,” which shares his life experiences from an educational standpoint. They also have had articles in local publications and are currently rated No. 4 in financial blogging in Virginia and in the top 100 in the U.S….

Their bottom line is helping people. “We can continue to grow in the amount of money we manage, but we want to maintain the very personal relationships we have with people,” Arie said.
“People never want to think of themselves as a number.”

We welcome your inquiries.

Tagged , , , , ,
%d bloggers like this: