529 college savings plans are a great tax-advantaged way to save for post-secondary education for your child or yourself. They aren't limited to paying for traditional universities but also many other post-secondary education programs. Search for "529 college savings" in this blog for the basics.
Sometimes people are reluctant to commit funds for fear their child won't pursue college or perhaps, might get a full-ride scholarship and not need the funds. Lucky you! But 529 funds can be used for post-graduate education and can be transferred to a sibling or other close relative.
Now there is a new twist on how excess 529 funds can be used. Congress recently passed the Secure 2.0 Act which offers another option.
"Starting
in 2024, funds leftover in a 529 plan can be transferred to a Roth IRA
for the beneficiary. There are some caveats, of course. There’s a
lifetime limit of $35,000. The beneficiary has to have earned income,
and the annual Roth IRA contribution limit also applies. The plan also must have been open for at least 15 years"according to financial expert Michelle Singletary, writing for The Washington Post. Singletary knows what she's writing about: she sent all 3 of her children to college without having to borrow money!
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