As backpacks are packed and another school year begins, many parents are thinking about what’s next for their children’s education. Whether college is just around the corner or still years away, now is a great time to review your education savings strategy.

One of the most popular tools for saving for future education expenses is a 529 plan. While many people know they can be used for college, fewer realize just how flexible these plans have become.

What Is a 529 Plan?

A 529 plan is a tax-advantaged savings account designed to help families save for qualified education expenses. Contributions are made with after-tax dollars, but the investments can grow tax-free, and qualified withdrawals are generally not subject to federal income tax.

They’re Not Just for College Anymore

Today’s 529 plans can often be used for more than a traditional four-year university. Depending on your situation and state rules, qualified expenses may include:

  • College tuition and fees
  • Books and required supplies
  • Room and board for eligible students
  • Certain apprenticeship programs
  • Up to $10,000 per year for K-12 tuition
  • Limited student loan repayment under current law

Understanding what qualifies can help you make the most of your savings and avoid unexpected tax consequences.

When Should You Start?

The earlier you begin saving, the more time your investments have the opportunity to grow. Even modest monthly contributions can add up over time.

If your child is already in high school or preparing for college, it’s not too late. A 529 plan may still offer valuable benefits, especially if you have several years of education expenses ahead.

Make Sure Your Plan Still Fits Your Goals

Life changes, and so do education plans. Before another school year gets underway, it’s worth asking:

  • Are you contributing enough?
  • Is your investment strategy still appropriate?
  • Have your education goals changed?
  • Are there other savings strategies that should be part of your plan?

Every family’s situation is different, and the right approach depends on your overall financial picture.

 

Education planning is about more than preparing for college. It’s about making informed financial decisions that support your family’s future.

If you’re wondering whether a 529 plan is the right fit for your goals, our Abacus! Professionals are here to provide better guidance, so you can make smarter decisions every step of the way.