2022 - 529 Report Card

Published on Saturday, January 21, 2023

Photo by Isaac Smith on Unsplash

After writing The 529 Handbook, I realized that families might benefit from my real world experience. I published my first report card late last year. This report card includes a peek at our education expenses, 529 transactions, and the impact on our federal and state taxes.

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Timing a December 529 Withdrawal

Published on Saturday, November 26, 2022

Photo by Guneet Jassal on Unsplash

In the eyes of many college savers, 529s are simple. Save money regularly while your student ages, then withdraw money as college expenses occur, either paying the school directly from the 529, or paying expenses out-of-pocket and reimbursing from the 529 later. From a casual glance, 529s look a lot like a regular savings account with some additional tax advantages/penalties.

But 529s can be more than that. One of my 529 tips concerns the timing of 529 withdrawals. The tax law states that the total withdrawals shouldn’t exceed the total eligible education expenses in a tax year. For example, a saver could wait until late December to withdraw money for an expense that happened in early January. This can give your savings another year of compounding. I like to call this the “December is for Withdrawals” tip.

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2021 - 529 Report Card

Published on Saturday, November 5, 2022

Photo by MChe Lee on Unsplash

While writing The 529 Handbook, I realized that many families could benefit from my real world experience. I’m going to start publishing my own 529 report card each year. The report card will include a peek at our education expenses, my 529 transactions, and the impact on my federal and state taxes.

Yeah, we’re already most of the way through 2022, but better late than never. Here’s my report card for 2021.

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Using a 529 when facing a bear market

Published on Saturday, October 22, 2022

My second oldest started her freshman year this fall. In January, when I realized I was going to be a little short on her 529, I made some last minute contributions to start catching up.

Then the market dropped. And kept dropping throughout the spring, summer and fall.

Stocks and bonds have both taken a beating this year. As of today (10/22/2022), the S&P 500 is down 22%, year to date. Bonds are also down, with Vanguard’s Total Bond Market Index Fund ETF (BND) down nearly 15%.

To date, my daughter’s 529 has lost 14% of its value. However, I'm not sweating it.

If you’re using a 529 to pay for college this fall, Here are some strategies that you can use to lessen the impact of a bear market.

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Buying a Laptop for School

Published on Saturday, July 16, 2022

My second child starts her freshman year at college in a few weeks. As part of preparing her for college, we ordered her laptop this week. I’m picking up much of the tuition tab and a significant portion of their housing, but I expect my kids to purchase their own laptop. By owning the purchase, they have maximum skin in the game, both in buying one that’s appropriate for their needs and later, as they take care to avoid damage.

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