For years, 529 college savings plans have been the go-to tool for parents looking to invest in their child’s future. They offer tax-free growth and withdrawals for education, plus potential state tax breaks. But with college no longer the default path for many kids, it’s fair to ask: is a 529 still the best fit?
In many cases, yes. Today’s 529s are more flexible than ever. You can now use them for K–12 tuition, certain apprenticeships, and even roll unused funds into a Roth IRA for your child, within limits. That makes them more adaptable to life’s twists than they used to be.
Still, 529s are designed with education in mind. If your child doesn’t intend to pursue higher education or if you want funds they can use for broader life goals, other options may be worth exploring.
A Roth IRA for teens builds tax-free retirement savings and offers future access for things like education or a first home. Custodial accounts (UGMA/UTMA) allow you to save and invest for any expense that benefits your child, though they come with fewer tax perks and transfer full control to the child at adulthood.
The takeaway: There’s no one-size-fits-all answer anymore. The right strategy depends on your values, your child’s potential path, and your long-term goals. A thoughtful financial plan can help you mix and match the right tools to give your kids the best shot at success, whatever that looks like for them.