May is National 529 Month!If you have a 529 Savings Account set up already or are considering putting one into place, we’re sharing facts and key considerations all month long!

Did you know there is an entire month dedicated to understanding the inner workings of the powerful savings vehicle, the 529 Savings Account?  Whether you are saving for educational expenses for yourself or those you love, 529s can offer tax advantages and, thanks to some recent updates, more flexibility now than ever before! This month, we’ll be going a bit deeper into the details of 529 accounts and how to best leverage their many benefits.  We’ll discuss elements to be mindful of as well as some of the lesser-known and creative ways to get the most from your 529!

For today, let’s start with the basics!  The most common use of a 529 account is to pay for college tuition. Funds can be used at any accredited college or university in the U.S. and even some abroad. You can transfer your 529, if you or another family member wants to go back to school; funds can be used for continuing education courses, including certificate programs and professional development. To break that down further, 529 funds can be used to:

• Cover Room and Board: In addition to tuition, 529 funds can be used to pay for on-campus or off-campus room and board.

• Pay for Books and Supplies: Qualified expenses include textbooks, supplies, and equipment required for courses.

• Fund K-12 Education: Some 529 plans allow you to use up to $10,000 per year for K-12 tuition at private, public, or religious schools.

• Transfer to a Family Member: If the original beneficiary doesn't need the funds, you can transfer the account to many family members of the original beneficiary without triggering taxes or penalties—as long as the new beneficiary is a qualified family member under IRS rules.
  

So who qualifies?

👨‍👩‍👧‍👦 Immediate Family

• Sibling/step-sibling, parent/step-parent, child/stepchild, foster child, or adopted child
  

👴👵 Extended Family

• Grandparent or grandchild, aunt or uncle, niece or nephew, first cousin
  

🧑‍🤝‍🧑 Even the Beneficiary’s Spouse

• You can transfer it to the beneficiary’s spouse or even the spouse of a sibling or cousin, as long as they fall under the IRS’s definition of family
  

Convert to Roth IRA: With the SECURE Act 2.0, provided the account has been open 15 years, unused 529 funds can be rolled over to a Roth IRA for the beneficiary, up to a lifetime maximum of $35,000.

Next, We Have Trade Schools: Yep! 529 plans aren't limited to traditional colleges. They can also be used for vocational and trade schools.

Repay Student Loans: Up to $10,000 from a 529 plan can be used to repay student loans for the beneficiary or their siblings.

Receive Contributions from Others: Friends and family can contribute to a 529 account, making it a great option for gift-giving occasions. May is the perfect time to take a fresh look at how 529 account features can best support your family’s unique educational journey. Whether you considering setting one up, or already have a 529 in place, stay with us this month to see how these accounts have evolved into a truly flexible and powerful financial tool!

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PLEASE NOTE: 529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.