A 529 plan is a tax-advantaged savings account designed to help families pay for education costs. These tax-advantaged accounts, are designed to help families cover education costs while also offering unique tax benefits.
Whether you’re a parent, grandparent, or even saving for your own education, understanding the latest 529 plan rules in 2025 can help you maximize their value.
• Tax-free growth: Investments inside a 529 plan grow tax-deferred and can be withdrawn tax-free if used for qualified education expenses.
• State tax benefits: Many states offer tax deductions or credits for contributions. Rules vary by state, so check your local program.
• High contribution limits: Unlike IRAs or 401(k) contribution limits are very high (often $300,000+ per beneficiary, dependingon the state).
Funds must be used for qualified education expenses to keep tax-free treatment. These include:
• College tuition, fees, books, computers, and supplies
• Room & Board
• Up to $10,000 per year for K–12 tuition
• Up to $10,000 lifetime for student loan repayment(per beneficiary)
• Certain apprenticeship programs
If funds are used for non-qualified expenses, earnings are subject to income tax plus a 10% penalty.
Thanks to the SECURE Act 2.0, unused 529 funds can now be rolled into a Roth IRA for the beneficiary, subject to IRS limits:
• The 529 must be open for at least 15 years.
• Beneficiary’s annual Roth contribution limit applies (e.g.,$7,000 in 2024).
• Must have earned income of contribution amount
• Lifetime rollover cap: $35,000.
• This feature helps reduce the fear of “overfunding” a 529 plan.
• Tax-free growth + state tax benefits (benefits available in some states)
• Flexible use across colleges and now K-12 schools
• Roth IRA rollovers for beneficiaries ($35,000 life time limit)
• Able to shift unused 529 Plan funds to another child in your family
• 529 Plans are a great option for you and your family to geta start on saving for your child’s future education expenses!
If you’ve ever searched for financial advice, you’ve probably noticed that not all “financial advisors” are the same. Some sell products, some earn commissions, and some are legally required to put your interests first—while others aren’t. In this article, we’ll break down threeimportant terms you’ll often hear: fee-only advisor, fiduciary, and independent advisor.
A 529 plan is a tax-advantaged savings account designed to help families pay for education costs. These tax-advantaged accounts, are designed to help families cover education costs while also offering unique tax benefits.
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