Hi, this is Quinn Arnold with Arnold & Mote Wealth Management. We get a lot of questions about 529 plans and what happens if you don’t use the money for the child that you set it up for.
First, make sure you’ve checked the long list of things that you can use 529 money on. It’s not just tuition. You can also use for computer costs, room and board, books, as well as fees at the school.
Second, know that it’s not just a traditional four-year private or public university where you can use 529 money. Trade and vocational schools also qualify.
Third, you can change the beneficiary on the account. If your first child doesn’t use the money and you have a second child – or even you or your spouse need the money – it’s available for that.
Finally, you can withdraw money from a 529 plan. But if you’re not using it for qualified educational expenses, you’ll pay a 10% penalty and taxes on any of the earnings. So really give that some strong thought before you take money out of the 529 for something besides education expenses.
Need help navigating 529 plans? We can help, let’s talk!