Los Angeles, CA – A couple with leftover 529 college savings for their children is seeking advice on what to do with the remaining $50,000. They’ve already put all four of their kids through college, and now they’re considering letting the funds grow for their future grandkids’ education.
According to financial experts, leaving the 529 accounts to grow for now is a viable option, especially since the future grandchildren have yet to be born. Another option to consider is using the funds for private school tuition for kindergarten through 12th grade, with an annual limit of $10,000 per beneficiary. Additionally, up to $10,000 per beneficiary can be used to repay student loans.
The couple is also contemplating the possibility of dividing the money among their future grandkids. With uncertainty about the number of grandchildren they’ll have and when they’ll reach college age, deciding the best way to allocate the funds requires careful consideration.
Another option on the table is to use the leftover 529 money to fund Roth IRAs for their children, the original beneficiaries. This option is newly available and allows for an annual rollover amount equal to the contribution limit, which is currently set at $7,000 for 2024. However, the beneficiary must have earned income at least equal to the rollover amount in order to qualify for this option.
The couple is seeking financial security for their future grandkids while also considering opportunities to benefit their adult children. Making the most effective decision for the leftover 529 funds will require thoughtful planning and consideration of the various options available.
Liz Weston, a Certified Financial Planner, provides personal finance advice and can offer assistance in making the best decision for the remaining 529 funds. She can provide guidance on how to allocate the funds for maximum benefit to both the couple’s children and future grandchildren.