Education (529)

529 plans, or Education accounts, are accounts offer Tax benefits for most expenses you'd encounter. This goes for K-12, as well as college.

They cover - tuition, fees, books, supplies, room and board, computers, and even K-12 tuition (up to $20,000/year in 2026), registered apprenticeship programs, and up to $10,000 lifetime for student loan repayment.

Why a 529?

529 plans can grow Tax free. That means unlike other regular savings or investing accounts, you don't have to pay taxes on profit your account makes.

For example, if you invest $10,000 dollars, and it climbs to $12,000, you don't pay taxes on the $2,000 you made, unlike a traditional account. This saves a TON of money over your life, and makes it easier for your family to pay off college.

Whats the catch?

529 accounts can only be used for education, so if you don't plan on going to college, or pursuing a job that doesn't require a degree, the money could sit there not be withdrawn without a 10% penalty.

However, their are many ways to still use the money without having to receive a penalty.

One way is rolling it into a Roth IRA (up to $35,000) as long as you qualify, (have an income, hold account for a certain amount of time)

Another great way to use the money is to change the benefactor, (the person who receives the money) so it can be used for their education. If I chose not to attend college, but my sister did, the money can go towards her Tax free.