529 plans: tax-advantaged college savings
A 529 plan lets families save for education in a tax-advantaged way. With recent law changes, it's more flexible than ever.
How it works
A 529 is a state-sponsored education savings account. Contributions go in after federal tax, but earnings grow tax-free and withdrawals for qualified education expenses are also tax-free. Many states give you a state income tax deduction for contributions on top of that.
What it can pay for
Tuition, fees, books, room and board at most accredited colleges. Up to $10K per year for K-12 tuition. Certain apprenticeship programs. Student loan repayment up to $10K lifetime.
What if my kid doesn't go to college?
You can change the beneficiary to another family member. Newer rules also let you roll unused 529 funds into a Roth IRA for the beneficiary, subject to limits. In other words, your child's college fund could become their retirement starter.
Project your 529 balance at age 18.
Time is the biggest variable. The earlier you start, the more compounding does the heavy lifting.
6% is common for 529 mixed funds
In-state public ≈ $30k
Years until college
15 yrs
180 months of contributions
Projected at age 18
$72,705
Coverage
61%
≈ 4 of 8 semesters
Coverage of 4-year cost ($120,000)
Tax-free as long as funds are used for qualified education expenses.
Insight
You're on pace to cover about 61% of four years. Bumping the contribution by $50/month would close most of the gap.
You've put the work in
Ready to put real money to work?
You've moved through the foundation, the growth, and you're eyeing the bigger moves. That's where 1-on-1 coaching kicks in.