College Savings (529 Plan)

Plan, open, and optimize an education savings account — setting your child up for college without derailing your own retirement.

15 action items~15 min to complete4 sections

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Set Your Target',

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Estimate the expected cost of your target college type: public vs. private, in-state vs. out-of-stateKey

Apply the financial aid expectation: plan to self-fund 50–75% and expect some aid/loans for the restAction

Calculate the monthly contribution needed starting today using an assumed 6% growth rateKey

Do NOT sacrifice retirement savings for college savingsWatch out

Factor in inflation for education costsKey

Model multiple college scenariosAction

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Choose between your home state's 529 and another state's planKey

Research state tax deduction limits for your state — deductions vary dramaticallyAction

Open the account with yourself as account owner and your child as beneficiaryAction

Set up automatic monthly contributions from your bank account

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Use an age-based investment option for automatic glide path toward collegeKey

Check the expense ratios of your plan's investment optionsAction

Review and rebalance the portfolio as your child approaches college ageWatch out

Stress-test portfolio against market downturnsKey

Shift to conservative funds three years before collegeAction

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Know qualified expenses: tuition, room & board, books, fees, K-12 tuition (up to $10K/yr), trade schoolsKey

Know the beneficiary change rules — funds can be transferred to siblings or other family membersAction

Understand the new 529-to-Roth rollover option (2024+): up to $35K can be rolled to a Roth IRAKey

Check impact on financial aid: 529 in parent's name reduces aid by max 5.64% of value

Plan beneficiary changes for multiple childrenKey

Document non-qualified withdrawals carefullyWatch out

Review 529-to-Roth rollover eligibility requirementsKey