Leftover 529 Funds: Maximizing Your Educational Savings

Many parents who have saved for their children's college education through 529 plans may find themselves with leftover funds after their children graduate or pursue other paths. According to the College Board, the average cost of tuition and fees for a four-year public college is $10,000 per year, while the average cost for a four-year private college is $35,000 per year. This means that even with 529 savings, many families may have some funds left over after their children graduate.

There are a number of options available to families with leftover 529 funds. These options include:

• Rolling over the funds to another beneficiary. If you have multiple children, you can roll over the leftover funds to a 529 plan for another child.
• Using the funds for other qualified expenses. You can use the funds to pay for certain qualified expenses, such as K-12 tuition, private school tuition, and tutoring.
• Taking a withdrawal from the plan. You can take a withdrawal from the plan, but you will be subject to income tax and a 10% penalty on the earnings portion of the withdrawal.
• Transferring the funds to an ABLE account. If your child is disabled, you can transfer the funds to an ABLE account, which is a tax-advantaged savings account for people with disabilities.

The best option for you will depend on your individual circumstances. If you have multiple children, rolling over the funds to another child's 529 plan may be a good option. If you need the funds for other qualified expenses, you can use the funds for those expenses. If you need to withdraw the funds, you should be aware of the tax consequences.

Here are some additional tips for maximizing your leftover 529 funds:

• Consider your child's future plans. If your child is not planning to attend college, you may want to consider using the funds for other qualified expenses, such as K-12 tuition or private school tuition.
• Think about your own financial situation. If you need the funds for your own retirement or other expenses, you may want to consider taking a withdrawal from the plan.
• Talk to a financial advisor. A financial advisor can help you assess your options and make the best decision for your individual circumstances.

Conclusion

Leftover 529 funds can be a valuable asset for families. By carefully considering your options, you can make the most of your savings and help your child achieve their educational goals.

Additional Resources

• Saving for College with a 529 Plan
• Using 529 Funds for K-12 Education
• Taking a Withdrawal from a 529 Plan
• Transferring 529 Funds to an ABLE Account

Keywords

• 529 plans
• Leftover 529 funds
• College savings
• Withdrawals from 529 plans
• Transfers from 529 plans
• ABLE accounts