Planting the Seeds for the Future

Prepared Retirement Institute |

Each year on May 29th, 529 Day reminds families, professionals, and advocates across the country to reflect on the importance of planning for education. At Prepared Retirement Institute, we see 529 Day as an opportunity to educate clients and communities about the long-term value of setting aside funds for future learning—whether for a child, grandchild, or loved one. 

While 529 plans offer tax benefits and investment flexibility, they also represent something more meaningful: a way to plant seeds today that may grow into life-changing opportunities tomorrow.

Small Steps with a Big Purpose 

Rising education costs can feel overwhelming, but getting started doesn’t require a large sum. Small, consistent contributions—made over time—can create a valuable resource for future educational expenses. 529 plans allow for recurring contributions, which can help encourage disciplined saving habits. 

Just like tending a garden, education planning takes intention, patience, and the right conditions. A well-structured savings strategy—monitored and adjusted over time—can help position families to manage future expenses more effectively. 

What Is a 529 Plan? 

A 529 plan is a tax-advantaged investment account specifically designed to help individuals and families save for qualified education expenses. These expenses may include: 

  • Tuition and fees 
  • Room and board 
  • Books and supplies 
  • Certain technology-related costs 
  • K–12 tuition (for eligible schools) 
  • Student loan repayment (subject to limits) 
  • Approved apprenticeship programs 

Contributions to a 529 plan grow tax-deferred, and qualified withdrawals are federally tax-free. Many states offer additional tax benefits, but these vary depending on residency and plan selection. It’s important to review your specific plan’s rules or speak with a financial professional for guidance. 

Account owners retain control over how and when the funds are used, and they may change the account beneficiary to another qualifying family member if needed. 

More Than Dollars—A Message of Belief 

At Prepared Retirement Institute, we believe 529 plans can be just as symbolic as they are practical. Contributing to a 529 sends a powerful message: We believe in your future. 

Research suggests that children with even small amounts of savings earmarked for education are more likely to pursue and complete higher education. While savings amounts may vary, the act of planning itself reinforces the value of education and long-term thinking. 

A Family Effort 

529 plans aren’t limited to parents. Grandparents, aunts, uncles, and close family friends can all contribute. With the rise of e-gifting platforms, it’s easier than ever to give meaningful support for birthdays, holidays, or milestones. 

Instead of short-lived gifts, contributions to a 529 plan represent a long-term investment in a child’s aspirations—offering value that endures beyond the moment. 

Flexibility for the Future: Roth IRA Rollover Option 

Recent legislation—specifically the SECURE 2.0 Act—introduced an additional option for unused 529 plan funds. As of 2024, certain unused funds from a 529 plan may be eligible for a tax-free rollover into a Roth IRA for the same beneficiary, subject to specific rules and limitations, including a lifetime cap and holding period requirements. 

This flexibility may provide families with additional reassurance, knowing that funds originally intended for education can still support a beneficiary’s long-term financial goals. As with all financial strategies, it's essential to speak with an advisor to understand eligibility and how this provision may—or may not—fit into your overall plan. 

Let’s Plant the Seeds—Together 

At Prepared Retirement Institute, we believe that every smart education plan starts with a conversation. Whether you’re just beginning to explore your options or want to incorporate 529 planning into your broader wealth strategy, we’re here to help you prepare with purpose. 

This 529 Day, consider taking action: 

  • Open a new 529 account 
  • Review or increase automatic contributions 
  • Invite loved ones to participate through gifting 
  • Schedule a review of your education savings strategy 

Because every tree starts with a seed—and the earlier it’s planted, the more time it has to grow.