Hack Your Wealth
529 college savings plans: rules, tax benefits, & qualified expenses
Apr 14, 2020 · 1 hr 10 min
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#26: College affordability is tough but 529 college savings plans can help you boost college savings.

529s have similarities to Roth accounts. They are (mostly) taxed going in, but grow and get withdrawn tax-free (if spent on qualified things).

But 529s also have complexities, and the rules changed significantly with the Tax Cuts and Jobs Act and, more recently, the Secure Act.

So for this week’s podcast, I invited Ann Garcia, a CFP who specializes in (and blogs about) college financial planning, to deep dive on how 529 college savings plans work.

We talk about:

  • Key rules, tax benefits, and pros & cons of 529s
  • What are considered “qualified” educational expenses, how it’s enforced, and what happens if you fail to spend on qualified expenses
  • When it makes sense to invest in a different state’s 529 plan vs. your own state’s
  • Strategies and tradeoffs of grandparents funding 529s
  • Important changes to 529s introduced by the Tax Cuts and Jobs Act and the Secure Act
  • How the Private College 529 allows you to lock in future tuition using today’s prices

Do you have a 529 plan for your kiddos? Do you invest in an out-of-state 529 (if so, why)? Do you plan to roll into a Private College 529? What other 529 questions do you have? Let me know by leaving a comment.

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Links mentioned in this episode:

Intro/Outro: Old Bossa by Twin Musicom.

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