What is a 529 plan and should I open one for my child?

A 529 is a state-sponsored college savings plan. Contributions are made with after-tax dollars; money grows tax-free; and qualified withdrawals for education expenses (tuition, room and board, books, computers) are completely tax-free. Many states also offer a state income tax deduction for contributions. The 2024 SECURE 2.0 Act added a significant benefit: up to $35,000 of unused 529 funds can be rolled into a Roth IRA for the beneficiary (subject to annual Roth IRA contribution limits and a 15-year account age requirement). If you have children and expect to help fund their education, opening a 529 early — even with small monthly contributions — allows decades of tax-free compounding. Use the College Planner at wealthserene.com/tools/college-planner to project costs and required savings.