529 Plans: What You Should Know

December 5, 2023

Christopher L. Sassone, CFP®, CLTC® 

I often hear from parents who want to save for their kids’ education, but what if your child decides not to go to a 4-year university? A 529 savings plan can still set them up for success.  

First, what is a 529 plan? It is a savings plan designed to pay for education and can offer significant tax advantages. Earnings on your contributions grow tax-free, and withdrawals are also tax-free when used for qualified expenses such as tuition, room and board, books, or certain technology expenses.  

Additionally, 529 plans are no longer restricted to just higher education. Now they can be used for K-12 expenses, student loan repayments, even apprenticeships and vocational schools. If a traditional degree isn’t what your child dreams of, a 529 plan can still support costs related to training programs in a variety of fields.  

Furthermore, new changes in the SECURE 2.0 Act allow up to $35,000 to be rolled over into a Roth IRA. So, if you have funds left over after education expenses are paid, your child can still benefit from the plan.  

These 529 plans offer a range of options but also come with complexities to consider.  

To dive deeper, check out my comprehensive article, “529 Savings Plans Aren’t Just for College Anymore.” And when you’re ready to take the first step to support your child’s education, please reach out to us at Davie Kaplan, and we’ll help identify the savings strategies best for you. 

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