Planting The Seeds for the Future: Celebrating 529 Day

Each year on May 29th, families, financial professionals, and education advocates across the country recognize 529 Day—a time dedicated to spreading awareness about the benefits of 529 college savings plans. But beyond the tax advantages and investment flexibility, 529 Day is about something much deeper: planting seeds today for the dreams we want to see grow tomorrow.

Saving for education requires intention, patience, and the right environment to thrive. Whether you're a parent, grandparent, other family member or friend, or simply someone who believes in the power of education, 529 Day is the perfect time to start nurturing a brighter future.

The Power of Small Seeds

It’s easy to feel overwhelmed when thinking about future education costs– it is no secret that college tuition continues to rise, and student debt is a heavy burden for millions of Americans. But much like planting a seed, starting small can lead to something meaningful over time. A $150 annual contribution may not seem like much but invested wisely in a 529 plan, those contributions have the potential to grow to over $5,000 by the time the child is ready to pursue higher education.[1]

The key is consistency. Just as a garden needs regular watering and sunlight, a 529 plan benefits from regular contributions and thoughtful monitoring. Automatic monthly deposits, even in modest amounts, can create a solid foundation for future educational opportunities with the benefit of tax-deferred compounding growth.

Why 529 Plans Matter

A 529 plan is a tax-advantaged investment account specifically designed to help families save for education expenses. Contributions grow tax-deferred, and withdrawals used for qualified education expenses are tax-free. That includes tuition, fees, books, supplies, room and board, and technology[2]. Thanks to recent changes, 529 plans can also be used for K-12 tuition[3] and even to repay student loans[4]. The plans can cover costs associated with apprenticeship programs[5], graduate school, and even continuing education courses at federally accredited institutions.

The real beauty of a 529 plan lies in its flexibility and control. Account owners, also known as participants, can choose from a wide range of investment options, adjust beneficiaries if one child doesn’t need the funds, and even retain control of the account indefinitely while keeping funds out of their estate!

529s are not just an account—they're gardens of opportunity, allowing you to invest in the aspirations of those you love.

Growing More Than Money

When you utilize a 529 account, you're not just investing dollars—you're investing in opportunities. You’re telling your child: I believe in you and your future. That encouragement is as valuable as the account balance itself.

Research shows that children with dedicated education savings, no matter how small, are more likely to attend and graduate from college.[6] The psychological impact of knowing someone believes in your potential can change a child’s trajectory. In that sense, a 529 plan becomes more than a financial tool; it becomes a symbol of hope and support.

A Shared Garden

529s aren’t just for parents. Grandparents, aunts, uncles, godparents, and even family friends can contribute. With gifting platforms and e-gifting tools becoming more common, it’s easier than ever to invite others into your education savings “garden.”

Birthdays, holidays, and milestones are all perfect opportunities to help nourish the account. Instead of toys or gadgets that may be quickly outgrown, by contributing to a 529 plan, loved ones are not just giving a gift, they’re helping those early dreams blossom into a lifetime of possibility. It’s a present that doesn’t break, fade, or get left behind, but one that compounds with care and time.

New Growth: Roth Rollover Flexibility

Thanks to recent legislation (SECURE 2.0), unused 529 funds can now be rolled over into a Roth IRA for the beneficiary. This provision, which went into effect in 2024, allows for tax-free, trustee-to-trustee transfers from a 529 account into a Roth IRA for the beneficiary up to a lifetime cap of $35,000.[7] This exciting change adds another layer of reassurance: even if the child doesn’t use all the funds for education, the money can still support their future through retirement savings.What started as one purpose now serves multiple needs, adapting as life changes.

Celebrate 529 Day by Taking Action

Every tree starts with a seed. Every graduate starts with a dream. And every smart education plan starts with a decision to save, to plan, and to believe in the future.

On this 529 Day, let’s commit to tending to tomorrow by planting the seeds of education today. Whether it’s your child, your grandchild, or a child in your community, the seeds you plant today may one day bloom into a life filled with learning, growth, and endless possibility. The sooner you plant the seed, the more time it has to grow.

Here are a few ways you can help your educational garden flourish today:

●      Open a new 529 account

●      Set up or increase automatic contributions

●      Share the benefits of 529 plans with your clients, friends, or family

If you want to learn more about how to integrate 529s into your overall wealth strategy, go to www.stillwaterfa.com/contact and reach out. Life and finances are too complex to tackle alone and we are here to help share the load.

[1] This number assumes $150 invested annually for 18 years at a 7% rate of return.

[2] Expenses for room and board and computer equipment and technology are subject to certain eligibility requirements.

[3] Considered a qualified expense for U.S. tax purposes. For state tax treatment, check your individual state guidelines. Not all states consider this a qualified expense

[4] Amounts paid as principal or interest on a qualified education loan. Amount that may be treated as qualified expense shall not exceed $10,000 as a lifetime cap per beneficiary.

[5] Covers expenses for books, supplies, and equipment required for a program registered with the U.S. Department of Labor.

[6] Source: Elliott, W., Song, H-a, and Nam, I. (2013). Small-dollar children’s saving accounts and children's college outcomes by income level. Children and Youth Services Review, 35 (3), p. 560-571.

[7] The 529 account must have been open for at least 15 years. Contributions made in the last 5 years, including earnings on those contributions, aren’t eligible for rollover. The rollover amount can’t exceed the annual Roth IRA contribution limit or the beneficiary’s earned income for that year.