A<\/span>s the weather warms and families start planning summer activities\u2014signing kids up for camp, scheduling summer school or organizing family vacations\u2014grandparents have a unique opportunity to think ahead. Parents are focused on the immediate season, but grandparents can be the guiding force in preparing for their grandchild\u2019s future by contributing to a 529 account in their name.<\/p>\n A 529 account isn\u2019t just a financial gift. It\u2019s a legacy that can ease the burden of educational expenses and set your grandchild on a path to success. Whether they choose a four-year university, a trade school or an apprenticeship, your contribution can make a lasting impact. Here\u2019s why gifting a 529 account is a smart move, and how to do it seamlessly.<\/p>\n While parents juggle summer care and extracurriculars, you can take the long view. A contribution to a 529 account allows you to support your grandchild\u2019s future without interfering with their family\u2019s immediate financial plans.<\/p>\n Many states offer tax deductions or credits for contributions to a 529 account. For example, Virginia residents can claim up to $4,000 per year, per Invest529 account on their state taxes. Additionally, funds grow tax-free and can be withdrawn tax-free for qualified education expenses, making it a tax-efficient way to support your grandchild\u2019s education.<\/p>\n The cost of education continues to rise, and student loans can be a heavy financial burden. By contributing to a 529 account, you\u2019re helping your grandchild potentially start adulthood with less (or no) debt. And, because of recent simplification changes to FAFSA calculations, a grandparent\u2019s 529 account is no longer considered in the financial aid calculation.<\/p>\n A common concern among grandparents is what happens if their grandchild doesn\u2019t end up using the 529 funds for college. The good news is that 529 accounts are highly flexible:<\/p>\n Use for Alternative Education<\/strong> \u2013 Funds can be used for a variety of post-high school paths, including trade schools, technical programs and registered apprenticeships. This is especially important since it\u2019s estimated that by 2031, 70% of jobs will require some form of post-high school education or training (Georgetown University Center on Education and the Workforce, 2021) but not necessarily a four-year degree.<\/p>\n Transfer to Another Beneficiary<\/strong> \u2013 If the original child doesn\u2019t use the funds, the account owner can transfer them to another eligible family member, such as a sibling, cousin or even a parent returning to school.<\/p>\n Save for Future Education<\/strong> \u2013 There\u2019s no time limit on using 529 funds. If your grandchild decides to go back to school later in life, the funds will still be there.<\/p>\n Withdraw Without Penalty for Scholarships<\/strong> \u2013 If the child receives a scholarship, the amount of the scholarship can be withdrawn without a penalty (though taxes may still apply to earnings).<\/p>\n Transfer to a Roth IRA<\/strong> \u2013 Recent changes in federal law allow unused 529 funds to be rolled over into a Roth IRA under certain conditions, helping your grandchild potentially kickstart their retirement savings.<\/p>\n Yes! While 529 accounts are primarily known for funding college, they may also be used for certain 12 education expenses:<\/p>\n Private School Tuition<\/strong> \u2013 You can withdraw up to $10,000 per year, per student, for tuition at K-12 private or religious schools.<\/p>\n Educational Expenses for Special Needs Students<\/strong> \u2013 Some states allow funds to be used for additional educational expenses for students with disabilities.<\/p>\n State Tax Considerations<\/strong> \u2013 While federal law allows K-12 tuition withdrawals, not all states provide the same tax benefits for these withdrawals. It\u2019s important to check your state\u2019s rules before using a 529 account for K-12 expenses.<\/p>\n If your grandchild already has a 529 account, you can contribute directly to it. If not, you can open one in their name, giving you control over the funds while ensuring they\u2019re used for education, securing state tax deductions for yourself and ensuring no impact on financial aid decisions.<\/p>\n Many 529 programs have online gifting portals that allow you to contribute easily and even send a personalized message with your gift.<\/p>\n You can contribute up to five years\u2019 worth of the annual gift tax exclusion ($19,000 per person in 2025) in a single year without triggering gift taxes \u2013 and married couples can make joint gifts to double that amount. Special 529 rules also allow for lump sum contributions that can count as a tax-free gift. This is a great estate planning tool that really jump-starts education savings while allowing you to retain control of the account. Consult your tax advisor for more information about your specific tax situation and tax consequences.<\/p>\n Consider making 529 contributions a birthday or holiday tradition, reinforcing the value of education while strengthening family ties \u2013 and recurring contributions are an even better idea.<\/p>\n As the sun shines and families begin to embrace summer fun, take the opportunity to think beyond the season. A 529 account is a gift that grows\u2014one that will make a meaningful difference in your grandchild\u2019s future for years to come.<\/p>\n Making sense of a 529 gift <\/p>\n","protected":false},"author":3,"featured_media":16259,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[202],"tags":[],"class_list":["post-16070","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-spring-summer-2025-features"],"acf":[],"_links":{"self":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/16070","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/comments?post=16070"}],"version-history":[{"count":3,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/16070\/revisions"}],"predecessor-version":[{"id":16260,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/16070\/revisions\/16260"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/media\/16259"}],"wp:attachment":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/media?parent=16070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/categories?post=16070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/tags?post=16070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why a 529 Gift Makes Sense<\/h3>\n
1. It Helps Parents Focus on the Now<\/h4>\n
2. It Offers Tax Benefits<\/h4>\n
3. It Reduces the Need for Student Loans<\/h4>\n
What Happens if the Child Doesn\u2019t Attend College or Gets a Scholarship?<\/h3>\n
Can the Funds Be Used for K-12 Education?<\/h3>\n
How to Give the Gift of a 529<\/h3>\n
Open an Account or Contribute to an Existing One<\/h4>\n
Use Gifting Platforms for Easy Contributions<\/h4>\n
Supercharge Savings with a Lump Sum<\/h4>\n
Make It a Tradition<\/h4>\n
Mary Morris, CEO of Commonwealth Savers<\/a>, which oversees Invest529<\/a>, ABLEnow<\/a>, SOAR Virginia<\/a> and RetirePath Virginia<\/a>, brings more than three decades of financial and taxation services experience to her role as an industry authority.<\/h5>\n","protected":false},"excerpt":{"rendered":"