What to Do With a 529 Plan If Your Kid Doesn't Go to College

You have money in a 529 plan for your child’s college education. If your kid doesn’t go to college, Consumer Reports says, you can still put the money to good use.… See more

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What Happens To Your 529 Plan If Your Kids Don't Go To College?

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Aug 29, 2024 · 1. Use the money to pay for non-college education. If you use 529 plan funds for non-education purposes, you'll face a 10% penalty on the gains portion of your withdrawals.

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How To Use A 529 Plan If Your Child Doesn’t Go To College

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Sep 18, 2024 · If you withdraw money from the 529 account, and you don’t use it for qualified educational expenses, you’ll have to pay the 10% withdrawal penalty on the earnings and …

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What Happens To Your 529 Plan If Your Child Doesn’t Go To College

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Apr 17, 2017 · It is well known that 529 plans are the best way to save for your child’s higher education expenses. 77% of parents who are saving for their child’s college expenses are …

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FAQs about What to Do With a 529 Plan If Your Kid Doesn't Go to College Coupon?

Should I use my 529 plan if my child doesn't go to college?

If you've been saving for your child's education using a 529 plan and they've decided not to attend college, you may be wondering what options are still available to use the money. 529 plans were established to provide a tax-advantaged way to save for education. Money saved in a 529 plan generally grows tax-deferred at the federal level. ...

What happens if you don't use a 529 plan?

However, if you withdraw the money from the account, and you don’t use it for educational expenses, you’ll have to pay a 10% 529 plan penalty on the earnings and growth. That sounds like bad news for diligent savers who have children who skip college to join the military, the workforce or to start a business. ...

Should my child save in a 529?

Even if your child doesn’t take a traditional college path, saving in a 529 can be a smart move. Here’s why. You can use money in a 529 at any institution of higher education that receives financial aid. ...

Should you save a 529 for college?

That gives you leeway to decide how to use the money if your child is on a different track. Saving in a 529 remains one of the best ways to put away money for college because you get big tax breaks on the earnings if you spend it on qualified education costs. More than 30 states also give you a tax deduction on your contributions. ...

Can a student withdraw money from a 529 plan?

A student doesn’t have to attend a traditional university to spend down 529 Plan funds. Expenses at technical and vocational schools as well as community colleges may be eligible for tax-free withdrawal from a 529 Plan. SavingforCollege.com has a lookup tool to determine a school’s 529 eligibility. Send another child (or family member) to college. ...

What if my 529 beneficiary doesn't go to college?

This includes federal and private student loans. Even if your 529 beneficiary doesn’t go to college, you, as the account holder, can change the beneficiary at any time. Let’s say your youngest child doesn’t pursue college or chooses a lower-cost option, and it frees up some of their 529 funds. ...