Betterment Launches 529 Education Savings Solution

Users will be able to view their education savings alongside their other investments in one dashboard. 

Reported by Natalie Lin

Betterment at Work, a provider of financial benefits, has launched a 529 education savings solution that offers plan participants a digital dashboard for 529 plan enrollment and contributions.  

The 529 solution is provided through a partnership with Ascensus and will be available to plan sponsors who leverage Betterment’s 401(k). The new product allows employers to offer 529 plans, support payroll direct deposits and provide a matching contribution. 

“Our offering at the core is a 401(k), but alongside saving for retirement, we know that individuals are also thinking about how to save for future education needs, how to pay down student debt, thinking about an emergency savings,” says Kristen Carlisle, general manager and vice president at Betterment. “We’ve built a platform that allows for people to conceptualize these financial decisions alongside each other.” 

Education and retirement savings are tethered to one another, says Carlisle. The two SECURE 2.0 provisions focused on student loan payments—employer contributions matching student loan payments and the ability to set up emergency savings vehicles—do not go into effect until 2024. Once they take effect, individuals will more easily be able to consider student debt management and retirement saving at the same time. 

“Those who are not paying down student debt no longer need to be penalized by not contributing to their 401(k),” she says. “If their employer has a match, they can match into their 401(k) what they’re paying down their debt.” 

In addition, included in SECURE 2.0 is the expansion of how 529 accounts can be leveraged. Individuals can save for education purposes beyond just higher education institutions. According to Carlisle, it has been proposed that excess 529 funds could go into the beneficiary’s IRA.  

“We’re excited by the opportunity to expand 529 awareness and availability to the Betterment community through this integrated solution,” added Peg Creonte, president of government savings at Ascensus, in a statement. “Our partnership with Betterment is just one example of our continued commitment to technology-first distribution solutions for our institutional clients and state partners.” 

Tags
529 plan, ascensus, Betterment, Kristen Carlisle, Peg Creonte, SECURE 2.0, student loan,
Reprints
To place your order, please e-mail Industry Intel.