Stacy's News: New Savings Opportunities for Your Child’s Education

Stacy Brilliant, MBA

August 13, 2025

Maximizing Your Child’s Future: 529 Plans & New Savings Opportunities under the Big Beautiful Bill

Saving for college takes thoughtful strategy—and recent changes to the 529 plan landscape offer more flexibility than ever before.

What’s Stayed the Same—and Why 529s Still Shine

Tax benefits remain core. Your contributions grow tax-deferred, and withdrawals for qualified education expenses are federal–tax-free—a powerful advantage over taxable savings vehicles. Many states also still offer state tax benefits for 529 contributions.¹
Primarily for college, still ideal. You’ll still want to prioritize saving for college costs: tuition, housing, books, etc. These remain qualifying expenses—and with college prices rising, preserving more of those 529s for the long haul can pay off.²

What’s Brand-New: Expanded Uses under the One Big Beautiful Bill

1. K-12 Education Expenses—Now Broader & More Lucrative

The law boosts the annual K-12 529 withdrawal cap to $20,000 starting in 2026, up from $10,000 prior.³

It also broadens qualified expenses to include:

Curriculum, books, and online learning tools;
Tuition for tutoring or classes (must be qualified instructors);
Standardized test fees (SAT, ACT, etc.);
Dual enrollment college courses in high school;
Educational therapies for students with disabilities (e.g. speech, OT, behavioral).⁴

2. Credentialing, Licensing & Workforce Training—Now Eligible

529s may now fund broader career advancement paths: programs under the Workforce Innovation and Opportunity Act (WIOA), registered apprenticeship programs, licensing and certification prep (like bar, CPA), and continuing education—covering tuition, books, fees, testing and equipment.⁵

3. ABLE Account Rollovers Now Made Permanent

Previously expiring at end of 2025, the ability to roll 529 funds into an ABLE account tax-free is now permanent—helping families who may wish to use the money for broader disability-related needs.⁶

4. Introducing "MAGA"/"Trump" Savings Accounts

The bill also creates a brand-new, general-purpose savings account often called “MAGA” or “Trump Accounts” (distinct from 529s). The federal government will initially seed $1,000 at birth for eligible children born 2025–2029. Parents can contribute up to $5,000 annually, and gains are tax-deferred—but withdrawals are taxed at long-term capital-gains rates (not tax-free) and penalties apply if used for non-qualified purposes.⁷

These offer extra flexibility for early savings beyond education—but lack many of the tax advantages of 529s.

Strategic Advisor Perspective: How to Leverage These Changes

Scenario	Strategic Consideration
Immediate K-12 needs (books, tutoring, dual enrollment)	529 funds can now address these—especially if you're aiming to reduce college costs via dual enrollment.⁸
Trade, license, certification	529s can fund credentials—great for students opting for non-traditional pathways.
Need flexibility beyond education	MAGA accounts may complement, not replace, 529s—best for general-purpose savings with fewer tax benefits.
Disability-related expenses	ABLE rollover gives essential flexibility—no tax cost.
College-focused savings	Still primary goal—balance use of 529s carefully against growing college costs and new loan restrictions in OBBBA.⁹

Closing Thoughts

The One Big Beautiful Bill, enacted July 4, 2025, marks the most sweeping expansion of 529 plan flexibility in years. Whether enabling earlier academic costs, supporting trade credentials, or providing disability-friendly rollovers—these enhancements empower families to tailor their savings strategy like never before.

Our goal is to help you build a plan that balances today’s opportunities with tomorrow’s goals. Start early, stay diversified, and use these new tools wisely—education isn’t one-size-fits-all, and now your savings strategy doesn’t have to be either.

Reach out to us at 215-579-5601 for us to provide you with more details on how to maximize your child's future.

And, as always, if you have any life changes or updates (i.e., new job, promotion, marriage, new baby, new grandchild, etc.) that may affect your current insurance and investing strategy, please call us at 215-579-5601.

Stacy Brilliant, Chief Operating Officer

#UNCOMPLICATEDADVICE #UNPARALLELEDSERVICE