Congratulations to all of our 2026 graduates!
This milestone is the culmination of years of preparation and hard work. Each graduation season is a perfect reminder that these school years pass so quickly, making the end of a school year the right time for families to review how they are preparing to support their children and grandchildren in their post-high school/pre-employment learning needs.
A 529 plan is a tax-advantaged savings account for needed education expenses. Contributions grow tax-free, and withdrawals are tax-free when used for qualified education costs. States like Iowa also offer state income tax deductions for contributions. The greatest benefit of a 529, however, may be its flexibility. While many people associate 529 plans strictly with traditional four-year colleges, today’s education savings options are far more flexible than many realize. Planning ahead, regardless of the path a student chooses—university, trade program, or professional certification—can provide opportunities and greatly decrease stress.
Here are a few important things to consider:
Education Looks Different Today – Graduates follow diverse paths. Four-year colleges are, as always, a strong option, but trade schools, apprenticeships, technical certifications, and two-year programs are increasingly popular and can lead to high-demand careers. A 529 plan can be used for qualified expenses at vocational schools, technical institutes, and apprenticeship programs. A student pursuing welding, HVAC certification, cosmetology, or advanced manufacturing can still benefit from 529 funds. Families should prioritize “career readiness options with less financial stress and anxiety.”
Starting Early Matters More Than Starting Big – A key misconception is that families need a large sum to begin saving. Consistency matters more than size. Even modest monthly contributions grow significantly over time through compounding. For instance, if you contribute $50/month -from a child’s birth to age 18- the $10,800 in contributions could potentially grow to $25,000! Grandparents and relatives can also contribute to a 529 instead of traditional birthday or holiday gifts. Starting a 529 early allows for greater long-term flexibility.
529 Plans Are More Flexible Than Many Realize – Qualified “Education Expenses” include more than tuition – such as books, computers, equipment, and room and board (depending on enrollment). Recent federal legislation expanded eligible uses to include certain apprenticeship costs and limited student loan repayment. Unused funds may even be rolled into a Roth IRA for the beneficiary, subject to certain rules and limits. Parents and grandparents maintain control of the account and can even change beneficiaries, if plans change. This flexibility makes a 529 plan a highly valuable long-term family preparation tool.
As families look back on the year’s accomplishments, it is also a good reminder to review how thoughtful planning leads to opportunities and makes a world of difference for every child. The future path is unique for every student; a smart, simple strategy plan today can help support whatever their tomorrow brings.
If you have questions about 529 plans or what options could be best for the student you love, please call our offices or email us for answers. We are here to support our Marion Neighbors in doing what is best for their families.
Craig Adamson owns TrueWealth Stewardship in Marion, a financial advisory practice, with 25 years of experience advising clients on tax and retirement planning strategies in Iowa and 20 other states.
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. Financial Planning offered through TrueWealth Stewardship. A Registered Investment Advisor and a separate entity form LPL Financial.
