Скачать или смотреть 529 Plans: How to Maximize Benefits | The Financial Commute (Ep. 87)

On this week’s episode of THE FINANCIAL COMMUTE, host Chris Galeski invites Wealth Advisor Patrice Bening to discuss planning for your child’s education with 529 plans, state-specific rules, and how to maximize benefits.

Here are some key takeaways from their conversation:

In California, 529 plan funds that are used for kindergarten through 12th grade private school tuition incur taxes and penalties.

Up to $10,000 from a 529 plan can be used for student loan payments, but this is a lifetime limit.

$35,000 of unused 529 funds can be rolled over (over several years because the annual contribution limit is $7,000 per year) into a Roth IRA for the beneficiary, with conditions:

o The 529 must be open for at least 15 years
o Contributions made in the last five years are not eligible for rollover
o Beneficiary must have earned income

529 funds can be used for tuition, mandatory fees, computers, books, supplies, and room and board, but specific rules apply. They can also cover food and groceries if the child lives off-campus, adhering to the university’s specifications.

Parents can use 529 funds to pay rent for a home they own and rent to their child, but the rent must be comparable to on-campus housing prices, the income is taxable, and the child can no longer be declared dependent on their parents and must have their own health insurance.

529 funds can be used to pay for off-campus housing if the amount doesn't exceed what the school charges for on-campus housing.

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‍Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.

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