10 Ways a 529 Plan Makes Education More Affordable
Money Girl
Macmillan Holdings, LLC
4.6 • 1.8K Ratings
🗓️ 29 May 2026
⏱️ 14 minutes
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Summary
1023. Are you worried about the future cost of education for yourself or a child? Laura reviews ten ways a 529 savings plan supercharges education savings and can even be used for young students, non-traditional coursework, and professional career pivots.
Key takeaways
- Contributions to a 529 plan get taxed upfront, but the account growth and withdrawals for qualified expenses are tax-free.
- States sponsor 529 plans with various benefits and fees; however, you don’t have to be a state resident to participate in the plan.
- There are no income restrictions to contribute to a 529, and owners typically name a child, who is the future student, as the account beneficiary.
- Qualified 529 expenses include many costs associated with traditional college, but also include trade schools, vocational training, and professional certifications.
- You can spend up to $20,000 per year on younger students from kindergarten through high school at public, private, or religious schools.
- Leftover 529 funds can be rolled over into a beneficiary’s Roth IRA, with certain restrictions.
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Transcript
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| 0:00.0 | education costs continue rising faster than inflation. So if you're worried about the future |
| 0:11.4 | expenses of education for yourself, a child or a grandchild, a 529 savings plan comes loaded |
| 0:19.6 | with benefits that make it more affordable, no matter the |
| 0:23.0 | student's age. Whether you want to send a young child to private school, pay for traditional |
| 0:28.4 | college, or get a new professional certification, you can use tax-free 529 savings to pay for it. |
| 0:36.8 | And if you're listening to this episode on the day it drops, |
| 0:39.6 | it is May 29th or 529. That means it's officially National 529 College Savings Plan Day. |
| 0:48.2 | So to honor this financial holiday, I'll review 10 ways using a 529 plan makes most types of education more affordable. |
| 0:56.5 | This episode will explain how a 529 supercharges savings for all types of education. |
| 1:03.4 | Plus, I'll review new rules that allow you to use a 529 in often surprising ways, |
| 1:09.3 | especially for young students, non-traditional coursework, and career pivots. |
| 1:15.3 | Hey, everyone, welcome back. It's episode 1023 of Money Girl. I'm your host, Laura Adams. I'm an award-winning |
| 1:23.1 | author, an on-camera spokesperson, and a money speaker. And in the show notes, you can find links |
| 1:29.3 | to learn more about me and how to reach out. All right, let's talk about 10 ways a 529 savings |
| 1:35.6 | plan cuts education costs for yourself or students in your family. Number one, getting tax-free |
| 1:44.1 | account growth. A 529 allows you to name and save for a future student who is the |
| 1:51.3 | account beneficiary. This could be a child or even yourself. After making contributions, |
| 1:57.3 | you can choose investments from a menu. It's kind of similar to a retirement account. |
| 2:02.1 | Unlike a traditional retirement account, you don't receive an upfront tax benefit for 529 plan |
| 2:09.7 | contributions. However, your earnings and any investment growth in a 529 are tax-free. So that allows your balance to grow faster than it could |
| 2:19.8 | in a taxable brokerage account. The second way is by making tax-free withdrawals. In addition to |
| 2:28.3 | having tax-free growth, withdrawals from a 529 plan are not taxed at the federal and often not taxed at the state |
... |
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