Staff Reports
Parents everywhere are always looking for ways to save for their children’s future, especially when it comes to big expenses like college and home ownership. One financial tool that’s gaining attention is the 529 account, a state-sponsored savings plan designed specifically for education expenses. These accounts allow parents to put money away where it can grow tax-deferred, meaning they won’t have to pay taxes on any earnings while the money is invested. Even better, if withdrawals are made for qualified education expenses, those funds come out tax-free. Parents can breathe a sigh of relief knowing their hard-earned money won’t be taxed every other year—it’s like finding a $20 bill in the pocket of your winter coat!
In recent years, 529 accounts have seen a surge in contributions, rising from about $43 billion in 2024 to an impressive $46 billion in 2025. This increase can be attributed to parents recognizing the value of these plans as a reliable way to build up a college fund. With total assets in 529 plans hitting a record $603 billion last year, it’s clear that many families are getting on board with this savvy saving strategy. And the government has made it even better by expanding what parents can use the money for. Not only can funds be used for college tuition, but they can also cover expenses for vocational schools, apprenticeship programs, and even help with student loan repayments. It’s like the Swiss Army knife of saving!
However, it turns out that not everyone is taking advantage of this golden opportunity. According to data from JP Morgan, about 60% of families haven’t gotten around to using 529 plans. Some parents are understandably worried about the future, especially given the unpredictable job market. After all, how can they plan for college expenses when they’re uncertain about their own financial stability? Others are stretched thin, needing to funnel every last dollar they can find toward helping their kids achieve the ever-elusive dream of homeownership.
One father shared his personal experience of saving in a 529 for his daughters since they were born. Recently, he was able to help his oldest daughter and her husband buy their first home. It’s heartwarming when stories like this come to light because they illustrate the ultimate goal of these accounts: to give kids the opportunity to thrive. In a world where college isn’t always the traditional path, parents can use 529 plans to secure their children’s futures in more ways than one.
Recently, two House bills were introduced that would expand the use of 529 accounts even further, allowing some funds to be used for first-time home purchases. While these bills are still on the legislative table and haven’t become law yet, they’re an indication of how lawmakers are starting to understand the changing landscape of education and housing. More options may soon be available for families looking for flexible ways to use their hard-earned savings. With a little luck, parents can soon take advantage of every possible opportunity to help their children reach their dreams without breaking the bank. So, if you’re not on board with a 529 plan yet, it might just be time to dive in!
