In this episode, we explore the expanded flexibility and potential of 529 plans in light of recent legislative changes. We begin with a refresher on how 529s have traditionally been used to fund college expenses, but quickly shift to how these accounts now offer broader applications thanks to evolving tax law, including updates from the Tax Cuts and Jobs Act, the SECURE Act 2.0, and the newly enacted One Big Beautiful Bill Act (OBBBA).

We discuss how 529s can now be used for K–12 education, not just for tuition but also for items like books, standardized tests, tutoring, and even educational therapy. This opens the door for families to apply these tax-advantaged funds toward private school and special needs services for younger children—services that are increasingly common among our clients.

We also highlight a major opportunity created by SECURE Act 2.0: the ability to roll over unused 529 funds into a Roth IRA in the name of the beneficiary. This means families can now provide their children or grandchildren with a financial head start—not just for education but also for retirement. The conversion limit is currently capped at $35,000 and must follow specific eligibility and timing rules, but it's a powerful long-term planning tool.

Another important change coming in 2026 is the increased annual limit for K–12 qualified distributions—from $10,000 to $20,000. This effectively doubles the amount that can be withdrawn tax-free for qualified expenses, making 529s even more practical for families with high educational costs early in a child’s schooling.

Finally, we talk about how the OBBBA expands 529 use to cover post-secondary credentialing programs. That includes trade schools, certifications, professional licenses, and even continuing education programs outside traditional colleges, as long as they’re recognized under federal law or by formal credentialing bodies. We emphasize how this change aligns with the current workforce needs, especially as more people pursue skilled trades or alternative career paths without accumulating student debt.

In short, 529 plans are no longer just for college. They're now a flexible, multigenerational financial tool that can support both education and retirement planning in more ways than ever before.

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⏱️ Chapters & Timestamps
(00:00) – Introduction
(00:29) – What Are 529 Plans?
(01:08) – Real Client Example: Private School Funding
(02:01) – Roth IRA Rollovers from 529s
(03:26) – The One Big Beautiful Bill Act (OBBBA) Explained
(03:50) – Expanded K–12 Expenses (Effective July 2025)
(04:54) – Increased Withdrawal Limits Starting in 2026
(05:48) – Credentialing and Trade School Use of 529s
(08:02) – Closing Thoughts and Contact Info

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit us online at https://www.hoslerwm.com/

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