05-23-2019 Columns

If you want to help pay for your children’s college educations, you might want to consider contributing to a 529 plan. With this plan, your earnings grow federally tax-free, as long as the withdrawals are used for qualified higher education expenses such as tuition and room and board. Yet, you may have heard some things about 529 plans that are keeping you from investing in one. However, these concerns may be more myth than reality – so let’s take a look at a few of them. “I need a lot of money to contribute to the plan.” This myth has essentially no truth to it. Typically, only a modest amount is required to open your 529 plan, and you can generally transfer small sums to it from your checking or savings account. “If my child doesn’t go to college, I lose out on the money I’ve put in.” This myth runs counter to one of the 529 plan’s greatest benefits: flexibility. If you’ve named one child (or grandchild) as a beneficiary of a 529 plan, and that child or grandchild decides against pursuing higher education, you can simply change the beneficiary to another eligible family member. Furthermore, if none of your intended beneficiaries will need the 529 plan, you can name yourself the beneficiary and use the money to take classes or receive some other type of qualified education opportunity. In a worst-case scenario, in which the money is never used for education, you will be taxed on the earnings portion of the withdrawals – but had you never contributed to a 529 plan, the funds would have been taxed, anyway. (However, you might be subject to a 10% penalty tax, in addition to regular income taxes, again on the earnings portion of the withdrawals.) “I have to invest in my own state’s plan.” Not true. You’re free to invest in the 529 plan of any state, no matter where you live. But it could be advantageous for you to invest in your own state’s plan, as you might receive some tax breaks for state residents. (The tax issues for 529 plans can be complex, so you’ll want to consult with your tax advisor about your situation.) Investing in your own state’s plan also might provide access to financial aid and scholarship funds, along with possible protection from creditors. “A 529 plan will destroy my child’s chances for financial aid.” While a 529 plan could affect your child’s financial aid prospects, it might not doom them. And the benefits of building significant assets in a 529 plan could outweigh the potential loss of some needs-based financial aid. Before investing in a 529 plan, you’ll want to explore it thoroughly, as you would any investment. You can find details about a 529 plan’s investment options, share classes, fees, expenses, risks and other information in the plan’s program description or offering statement, which you should read carefully before making any purchasing decisions. But, in any case, don’t let “myths” scare you off from what could be one of your best college-savings vehicles. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, its financial advisors and employees cannot provide tax or legal advice.

Let’s finish this

For decades, special interests have profited off of our broken insurance system while hard-working Michiganders have had their wallets drained. While knocking on thousands of doors in our community, the need to deliver auto-insurance relief was the number one issue I heard about – by far. Earlier this month, my colleagues and I succeeded where so many previous attempts have failed. The House passed a bipartisan auto-insurance reform package that will finally provide consumers with options and deliver rate relief for all Michigan drivers. When the Senate passed their insurance reform bill, Governor Whitmer threatened a veto because it did not guarantee rate relief and allowed companies to unfairly discriminate in setting rates by basing them off of non-driving factors. After thirty years of debate and sixteen weeks of committee hearings lead by Representative Wentworth, the House was ready to address the Governor’s concerns in our bill. House Bill 4397 includes guaranteed rate relief for all levels of insurance coverage. This guarantee will slash rates for every single Michigan driver and put more money back into the pockets of every member of our community. This legislation will literally put billions of dollars back into our communities. For the first time, long-lasting and meaningful auto-insurance reform is at our fingertips. Speaker Chatfield, Majority Leader Shirkey, and Governor Whitmer continue to negotiate in good faith towards a solution that will truly benefit every Michigan driver. Crippling insurance bills aren’t a partisan issue. They affect every single Michigan driver, and it’s time your state government did something about it. I’m incredibly hopeful that a compromise is reached, and I look forward to voting in favor of any legislation that reduces insurance rates for Michigan drivers. If I can ever be of assistance to you, you can reach me via email at PaulineWendzel@house.mi.gov, or by phone at 517-373-1403.

Budget update

The Senate last week approved its recommended state budget for the coming fiscal year. I was happy to vote in support of this spending plan because it keeps with our commitment to further invest in key priorities, including our children’s education and the state’s infrastructure. Importantly, this budget would ensure state government lives within its means for another year — balanced and with no new taxes. The Senate-approved budget would invest a total of $15.2 billion in education, which would be an increase of nearly $400 million over the current year, and schools would see a boost of between $135 and $270 per pupil. The per-pupil increase would represent the largest in 18 years and would be $107 million more of a foundation allowance increase than the governor’s plan. Our roads and bridges are, and should be, a concern for state leaders, and the Senate has again included more proposed spending for transportation needs — providing an additional $132 million for local road projects. With this budget we will have increased annual state spending on transportation by over $1.75 billion since fiscal year 2010. I look forward to exploring potential plans that provide for a long-term solution to our state’s ongoing infrastructure issues. The Senate has also prioritized funding for other important areas, including to help law enforcement make our communities safer, to help workers develop new skills and find good jobs, to improve rural access to health care services, to help preserve and protect our natural resources, and more. While this is only one step in an important series of steps to finalize the state budget for next year, the Senate has offered a fiscally responsible plan, and I will work to help ensure our state’s budget remains balanced, respects taxpayers and arrives on time. I appreciate hearing your thoughts on the important issues facing Southwest Michigan. You can reach me at 517-373-6960 or SenKLaSata@Senate.Michigan.gov.

Working to protect Michigan’s communities

On Thursday last week, I joined a group of colleagues to introduce the Jake Laird Act, a bipartisan bill named after an Indianapolis, Indiana, police officer who was shot and killed in 2004 in the line of duty by a man who struggled with mental illness.

This bill we introduced would provide grants to encourage states to adopt laws – similar to Indiana’s 2005 Jake Laird Law – that enable local law enforcement, with probable cause, to temporarily remove and retain firearms from individuals who are determined to be an imminent danger to themselves or others.

With the Jake Laird Act, states like Michigan can receive grants by adopting common-sense ‘Red Flag’ laws – with stringent due process and probable cause – to prevent those in imminent danger to themselves or others to have firearms.

Law enforcement remains on the front-lines of the fight against gun violence and making sure they have another tool in their tool box would further help them protect our communities. I’ve heard from countless folks in our district – students, teachers, gun owners, and law enforcement officials – and they agree that the Jake Laird Act is just common-sense and something we need to get done.

To learn more about important legislative issues, follow me on Twitter at @RepFredUpton or visit my website: upton.house.gov. You can also call my offices in Kalamazoo (269-385-0039), St. Joseph/Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).

Mental health is essential to everyone’s overall health and well-being, and mental illnesses are common and treatable. So much of what we do physically impacts us mentally – it’s important to pay attention to both your physical health and your mental health, which can help you achieve overall wellness and set you on a path to recovery. A healthy lifestyle can help to prevent the onset or worsening of mental health conditions, as well as chronic conditions like heart disease, diabetes, and obesity. It can also help people recover from these conditions.When dealing with dueling diagnoses, focusing on both physical and mental health concerns can be daunting – but critically important in achieving overall wellness. There are things you can do that may help. Finding a reason to laugh, going for a walk with a friend, meditating, playing with a pet, or working from home once a week can go a long way in making you both physically and mentally healthy. The company of animals – whether as pets or service animals— can have a profound impact on a person’s quality of life and ability to recover from illnesses. A pet can be a source of comfort and can help us to live mentally healthier lives. And whether you go to church, meditate daily, or simply find time to enjoy that cup of tea each morning while checking in with yourself – it can be important to connect with your spiritual side in order to find that mind-body connection. The Berrien County Health Department wants everyone to know that mental illnesses are real, and recovery is always the goal. Living a healthy lifestyle may not be easy but can be achieved by gradually making small changes and building on those successes. Finding the balance between work and play, the ups and downs of life, physical health and mental health, can help you on the path towards focusing both mind and body. For more information, visit www.mentalhealthamerica.net/may.