👩🏾🎓Happy 529 College Savings Day
Happy 529 College Savings Day!
I wanted to share with you the potential benefits of 529 plans as an important tool to consider for your loved ones college expenses.
1️⃣ While 529 plan assets can be used to pay for tuition and books, they can also pay for computers, internet access and other equipment.
2️⃣ 529 plans aren’t just for college. They can be used to pay up to $10,000 per year per student for K through 12th grade programs.
3️⃣ 529 assets can also be used to pay for registered apprenticeship programs and repayment of college debt.
4️⃣ Unused funds may be rolled into ROTH IRAs, within certain parameters.
5️⃣ I've never had a client regret setting up a 529 plan for their children and even grandchildren.
In short, saving for college expenses doesn't have to be difficult.
🐝 FAQ: 529 Plans & College Savings Tips for 2025
What qualified expenses can 529 plan funds be used for in 2025?
In 2025, 529 plan withdrawals remain eligible for a range of expenses: tuition, fees, books, supplies, computers, even internet access for students. You can also use up to $10,000/year for K-12 schooling. And unused funds may be rolled over to Roth IRAs (within IRS limits).
Can 529 plan funds be used for apprenticeship or student debt?
Yes. 529 plans in 2025 may cover registered apprenticeship program costs and can also aid in student debt repayment (subject to IRS rules). This expands flexibility beyond traditional college expenses.
How does rolling over unused 529 funds to a Roth IRA work now?
The rollover option allows transferring unused 529 funds into a Roth IRA for the same beneficiary (within limits). There are caps and eligibility criteria (like income phaseouts). Always confirm current IRS rules and your 529 plan’s policy before doing the rollover.
What happens if 529 funds are used for non-qualified expenses?
If 529 funds are used for non-qualified expenses, earnings are subject to income tax plus a 10% penalty (except in special cases). In 2025, always plan withdrawals carefully to avoid penalties and keep tax efficiency.
Should high-net-worth families use 529 plans even if they might not fully use them?
Yes. For many families, 529s still offer tax-advantages, control, and legacy options. You can direct unused funds to grandchildren or use the rollover to Roth IRA. The flexibility makes 529s attractive even if usage isn’t full.
📲 Schedule time to start your college savings plan.
Wishing you all peace, love and a FUN SUMMER!🌻
The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual. And of course please note that this email is not intended for specific tax advice. Consult your advisors.