Brenda Vingiello, Sand Hill’s Chief Investment Officer, joined Squawk Box to discuss her thoughts on the latest market trends and market outlook for 2025. This
Getting Educated on Education Savings
529 plans can now be used to fund up to $10,000 of private school tuition per year.
529 plans are funded with after-tax dollars, but then all income and gains are sheltered within the plan over time, and withdrawals are free of both federal and state tax as long as the proceeds are used for qualified education related expenses, such as college tuition, books and fees. Pre-2018, the term “529 Plan” was synonymous with “saving for college”. Today, that is no longer the case.
The new legislation made one significant change to how 529 plans are utilized. Going forward, up to $10,000 per student per year may be withdrawn from a 529 plan as long as those funds are used for private K-12 tuition. It is important to note that withdrawing from a 529 plan to pay for K-12 education could hinder the ability to fully cover the cost of a college education years later. As a result, education planning should be thoroughly reviewed with additional cash flow modeling to ensure education funding goals remain on target.
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