August 2025 – Fidelis Newsletter
Back to School? Back to Saving for the Future!
As we were brainstorming a theme for our August newsletter, one thing came to mind: Back to School!🎒✏️ For many, August means fresh notebooks, first-day outfits, and packed lunches… but it’s also the perfect time to talk about something equally important: saving for education. Whether you’re a parent, future parent, or someone who just wants to earn favorite aunt or uncle status, now’s the time to brush up on 529 plans and ways to fund future learning. Let’s break it down:
What’s a 529 Plan Anyway?
It is a dedicated savings plan for education that comes with tax perks and flexibility.1
- Tax-advantaged education savings account
- Grows tax-free if used for qualifying expenses
- Can be used for education expenses from kindergarten through graduate school, including apprenticeship and trade school programs
- Section 529 plans are sponsored and run by the 50 states and the District of Columbia; specific benefits and rules vary by state
Creative Uses & Fun Facts
You might think 529s are just for college tuition, but there’s more to it:
- You can use it for tech (hello, laptops!) as long as it’s for educational purposes2
- Studying abroad? Applicable. Including tuition, fees, room and board (not day-to-day travel costs, subject to other rules)5
- Didn’t use all the money? You can now roll up to $35k into a Roth IRA for the beneficiary under the Secure 2.0 Act (if the 529 account is at least 15 years old)2
- You can even change the beneficiary if needed without tax consequences2
- Grandparents can fund a 529 without impacting financial aid eligibility! The new simplified FAFSA form eliminates questions about grandparent contributions4
Real-Life Scenarios / Who It’s For
This isn’t just for parents of college-bound teens. Here’s who a 529 might work for:
- “You’re 26, just had a baby, and college feels forever away…but compounding interest says start now.”
- “No kids yet? You can open one for yourself. Who says you won’t go back for that MBA… or film school?”
- “Your nephew just turned 3 and you want to be the favorite aunt. Contribute to his 529 instead of another Paw Patrol toy.”
- “You’re a grandparent and want to help, but also want to avoid affecting financial aid? We’ve got you.”
Tips & Mistakes to Avoid
529s are helpful, but like all tools, they work best when used right:
- Don’t overfund unless you have a clear education goal
- Not knowing the rules of your own state’s 529 plans – there could be special tax incentives for residents
- Be mindful of investment choices based on time horizon
- Always name a successor owner (estate planning matters!)
- Procrastinating – it’s never too early (or late) to open a 529 plan
Questions?
We’re always happy to chat and guide you through the process, whether you’re just getting started or want to fine-tune your current plan. Book a quick call with our team HERE
Just for Fun: Back-to-School Favorites
We asked our team to share their childhood school supply obsessions and they did not disappoint:
- Sam: Glue. Just… glue. Elmer’s was elite. Bonus points if it peeled off your fingers in one perfect layer.
- Karley: Mechanical pencils…because clicky pens + color variety = epic pencil collection
- Rilee: Pretty planners and pens of course! Because organization should be aesthetic.
- Zach: Themed lunchboxes…every year was a new vibe. Power Rangers one year, SpongeBob the next.
- Tina: Calculators! Yes… she was the kid who actually loved math class.
Sources
- Investopedia. “529 Plan: What It Is, How It Works, Pros and Cons”
- IRS. “IRS: 529 Plans Q&A”
- Saving for College. “8 Common 529 Plan Mistakes to Avoid”
- Saving for College. “The “Grandparent Loophole” & the New FAFSA”
- Saving for College. “Using Your 529 Savings to Study Abroad”