529 plans provide families at all income levels with a tax-advantaged method for funding their children’s future education. Generally, contributions are invested and allowed to grow free of federal income tax when withdrawals are used to pay qualifying higher-education expenses, including tuition and fees for an undergrad or graduate school student; room and board, subject to limitations; computers, related equipment and internet access; and textbooks and other required school supplies. Earnings withdrawn for non-qualified expenses are subject to a 10 percent penalty and ordinary income taxes. However, thanks to the passage of the SECURE Act, families have more options for using their 529 savings.
The SECURE Act expanded the eligible use of tax-free 529 education plan withdrawals to include the following:
- expenses related to apprenticeships or job-training programs, including the purchase of required equipment and supplies;
- up to $10,000 to repay student loans for the plan beneficiary or one of their siblings; and
- up to $10,000 per year for a child’s K-12 tuition at a private school or religious school
The law also grants account owners the ability to change the name of a 529 plan beneficiary to another family member, such as a sibling pursuing an advanced degree or needing help paying off their student loans. Account owners may even name themselves as beneficiaries when they wish to return to school to improve their professional skills or to pursue another career field.
The SECURE Act also allows 529 beneficiaries to roll over as much as $35,000 of a 529 account balance into a Roth IRA for their own benefit. This is especially beneficial when a child decides against attending college, receives a full scholarship to their school of choice, or has funds remaining in their account after completing their education.
About the Author: Sean Deviney is a CFP®* professional, a retirement plan advisor and a director with Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC. He can be reached at the firm’s Fort Lauderdale, Fla., office at (954) 712-8888 or info@provwealth.com.
Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., 19th Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.
Sean Deviney, CFP®*, is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation.
As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state. Investors should carefully consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. This and other information about 529 plans is available in the issuer’s official statement and should be read carefully before investing. Investors should consult a tax advisor about any state tax consequences of an investment in a 529 plan. Investments mentioned may not be suitable for all investors.
* Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
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Posted on August 4, 2025