529 Plans
Grow Your Kid’s College Fund (Without Losing Sleep or Tax Dollars)
Between remembering snack day and navigating science fair sign-ups, the idea of planning years ahead for your child’s education might sound as appealing as assembling IKEA furniture blindfolded.
But hear me out—there’s one financial tool that can help you sleep a little easier when it comes to your child’s future: the 529 plan.
What is a 529 Plan?
A 529 plan is a tax-advantaged savings account designed for educational expenses. That means you can invest after-tax dollars, let them grow tax-free, and then withdraw that money tax-free for qualified educational expenses.
We’re talking:
Private K–12 tuition
College tuition
Books, laptops, room & board
Vocational or tech programs
But What If My Kid Decides to Be a Rockstar Instead of Going to College?
The question that gives every savings-savvy mom pause. You’re not alone.
Thankfully, a recent update to 529 plans has your back: If your child decides not to attend college, or gets a full-ride scholarship, you can now roll over up to $35,000 of unused 529 funds into a Roth IRA for them. No penalties. No taxes. Just a head start on retirement savings while you tearfully pack up their guitar amp.
Choose Your State (Even If You Don’t Live There)
Here’s a fun twist: You’re not required to open a 529 plan in the state where you live, or even where your kid will go to school. Each state has its own plan, and yes, you can shop around like you do for soccer cleats or meal delivery kits.
Let’s say:
You live in Massachusetts and your state offers a tax deduction for contributing to a 529.
But, Colorado’s plan has lower fees and better investment options.
Guess what? You can open a Colorado 529 plan. From Boston.
Where Do You Open One?
Good news! You don’t have to walk into a government office or sit on hold for 45 minutes. You can choose a 529 plan and open through the state’s website (e.g. Colorado = CollegeInvest). Or, you can open one through a brokerage firm like Fidelity, Vanguard, or Schwab.
What Did Sarah Do?
Ensuring I could pay for my kid’s education was (and is) a top priority for me. Because I’m a Type A planner, to take full advantage of the magic of compound interest, I opened 529 accounts before my kids were even born. Once my son arrived, I transferred the account to his name and kept contributing. When the next child arrives, I’ll do the same.
You can totally do this, too!
Mom Brain Recap
529 = education savings plan with tax-free growth and withdrawals for qualified expenses like tuition, books, room & board
New rule alert: up to $35,000 can be rolled into a Roth IRA if your child doesn’t use the funds
You can choose any state’s 529 plan—look for the one with the best benefits (low fees, tax deductions, strong investment options) OR
Big names like Fidelity, Vanguard, and Schwab offer easy-to-open plans
Raising kids is expensive, but saving for their future doesn’t have to be complicated.
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