The 529 Strategy Too Many High Earners Overlook
It’s summer. School’s out. Beaches are calling. Rosé is flowing.
But just because the school bell stopped ringing doesn’t mean you get to stop thinking about your kids’ education.
Especially if you're a forward-thinking, Type-A wealth builder who wants to give your kids the gift of opportunity, without compromising your own financial game plan.
The 529 Plan: A Serious Tool for Serious Savers
Never heard of a 529 plan? You’re not alone.
But if you’re serious about building wealth by choice, not chance, this is a tool you’ll probably want in your arsenal.
What Is a 529?
A 529 is a tax-advantaged investment account designed specifically for education costs. It can be used for K-12 private tuition, college expenses, books, technology, and even some apprenticeship programs.
The big win? Your money grows and comes out tax-free when used for qualified education expenses.
This isn’t a loophole. It’s a legitimate, government-sanctioned advantage. And one that too many high earners overlook.
Contribution Limits (and How to Maximize Them)
Let’s talk numbers.
Married couples can currently gift-split up to $38,000 ($19,000 per individual) per year per child without triggering gift taxes.
Want to front-load? With five-year averaging, married couples can contribute up to $190,000 ($95,000 as an individual) in one year, spread over five years for gift tax purposes.
There’s no federal contribution cap, but most states set a limit, usually north of $300,000 per beneficiary. Bottom line: you’ve got room to play.
Flexible by Design
Here’s one of the biggest upsides of a 529: flexibility.
Let’s say you saved $100,000, but your child only uses $80,000. That remaining $20,000? You can shift it to another child. Or a cousin. Or even a grandchild.
Thanks to the SECURE Act 2.0, up to $35,000 in leftover funds can now be rolled into a Roth IRA for the beneficiary (subject to annual Roth IRA contribution limits and a requirement that the 529 has been open for at least 15 years). That means education dollars that turn into retirement dollars, tax-free.
Think long game.
Tax Benefits: State by State
At the federal level, there’s no deduction for contributions. But remember: tax-free growth and tax-free withdrawals are the real win here.
At the state level, it varies.
New York: Deduct up to $10,000 per couple annually ($5,000 per individual).
New Jersey: $10,000 if you make $200,000 or less; none if above
California: No deduction, but you still get tax-free growth.
Florida and Texas: No state income tax, but you still enjoy the full benefits of tax-free compounding and withdrawals.
Not sure what your state offers? Here’s a helpful resource: finaid.org's full list of state-specific deductions.
Pro tip: Most states require you to use their specific 529 plan to get the tax deduction. But if your state doesn’t offer a tax break, you’re free to utilize the best plan.
Before You Hit “Open Account”...
Let’s pause for a second.
A 529 plan is a powerful tool, but that doesn’t mean it’s the right first move for everyone.
One of the most common missteps we see: parents racing to fund a 529 before locking in their own financial foundation.
No emergency fund? Behind on retirement savings? Unclear on your overall wealth strategy?
Then a 529 might not be the priority just yet.
Here’s why: dollars invested for your own future often have decades to grow through compounding. A 529 typically gets tapped when your child is 18. That’s not a lot of time to build significant growth.
Sometimes the smartest play is to keep your capital compounding and explore other ways to support your child’s education, like low-interest student loans. They’re not perfect, but they can be a strategic bridge that allows your personal wealth to stay in motion.
Remember, they say to “Put your own oxygen mask on first.” Because if you fund your child’s educational future before yours, you might end up relying on their diploma to fund your retirement…and that’s not a strategy.
Don’t Get Lost in the Noise
The internet is full of voices, some helpful, some just loud.
Anyone can jump on TikTok, throw around the word “wealth,” and look like an expert. But building real, sustainable wealth? That takes clarity, strategy, and trusted guidance.
Ask yourself:
Is this advice validated by someone who knows my situation?
Does it apply to my life, my goals, my values?
Or is it just another distraction disguised as opportunity?
You don’t need 100 financial tricks. You need a handful of high-quality decisions, made with intention.
That’s the Buffett playbook. The Munger playbook. And the JWA playbook.
Ready to Call the Right Plays?
If you want a 360° Wealth Advisory—built with education, retirement, and long-term security in mind—it starts with a conversation.
Let’s build a strategy that helps your kids thrive, and helps ensure your future isn’t an afterthought.
Schedule time to meet today.
Because building wealth is by choice, not chance.
Disclosures:
This piece contains general information that is not suitable for everyone and was prepared for informational purposes only. Nothing contained herein should be construed as a solicitation to buy or sell any security or as an offer to provide investment advice. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. Past performance does not guarantee any future results. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. For additional information about Julius Wealth Advisors, including its services and fees, contact us or visit adviserinfo.sec.gov.