Episode 20: Maximizing the Benefits of 529 Accounts

Summary

In this conversation, Nathalia discusses the benefits and details of 529 accounts. She explains that 529s are not just for college savings, but can also be used for trade schools, vocational schools, and K-12 private schools. Nathalia highlights the tax advantages of 529s, including tax-free withdrawals for education expenses. She also mentions the new law that allows unused 529 funds to be rolled over into a Roth IRA for the child after 15 years. Nathalia emphasizes the flexibility of 529s, such as the ability to change beneficiaries and the option to use the funds for student loan debt. She recommends researching state-specific 529 plans and considering tax benefits before choosing a plan. Nathalia encourages listeners to prioritize their own retirement savings and emergency funds before starting a 529 account.

Keywords

529 accounts, college savings, education expenses, tax advantages, Roth IRA, flexibility, state-specific plans, retirement savings, emergency fund

Takeaways

• 529 accounts are not just for college savings, but can also be used for trade schools, vocational schools, and K-12 private schools.
• Withdrawals from 529 accounts for education expenses are tax-free.
• Unused 529 funds can be rolled over into a Roth IRA for the child after 15 years.
• 529 accounts offer flexibility, such as the ability to change beneficiaries and use funds for student loan debt.
• Research state-specific 529 plans and consider tax benefits before choosing a plan.
• Prioritize retirement savings and emergency funds before starting a 529 account.

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