.png)
National 529 Day: Make College Affordable with a 529 Plan
- Leyder "Aiden" Murillo, CFP®, SE-AWMA®, AWMA®, MBA
- May 29
- 18 min read
Why National 529 Day Reminds Us to Plan Ahead for College Costs
I still remember the conversation with my parents when I told them I wanted to attend Pepperdine to earn my Master's in Business Administration (MBA) in Finance—it was my dream school, and I worked hard to get in since I did not get in for undergraduate. They generously offered to help pay for it, just like they had for my undergraduate education, which I completed in 2012. But this time, I told them I would take care of it myself. I had just entered the financial services industry in 2013, and by the time I graduated with my MBA in 2018, I had student loans I’m still repaying today.
As a CERTIFIED FINANCIAL PLANNER® professional now, I often reflect on how things could’ve been different if my family and I had known more about 529 Plans. I didn’t open one until after I started working in the financial services industry—and while I was able to use it for a few qualified education expenses, I missed out on the full benefits of starting early and letting those savings grow tax-free.
My parents used income from their rental properties not only to help me—but also to help my two older sisters pursue their educational goals. As naturalized, Spanish-speaking immigrants, they didn’t know that 529 Plans even existed, nor did they have access to anyone who could explain how it worked. They didn’t know who to ask, and no one was there to guide them.
I remember watching my father get up in the middle of the night to fix broken pipes or deal with tenants—sometimes even the difficult ones—just to save money instead of hiring a handyman or a property management company. He did it to stretch every dollar, not just for our household, but to keep funding our education dreams. They worked hard, but without a tax-efficient strategy like a 529 Plan, they ended up doing more with less support.
We lost my father in 2019, but those memories of his dedication, his grit, and his belief in our future have stayed with me. They continue to shape the way I approach planning—not just for myself, but for the families I serve.
That’s why National 529 Day means so much to me—not just as a professional, but as a son. It’s a powerful reminder of why college savings awareness matters, and how families—especially first-generation, bilingual, or underserved households—can benefit from financial tools that were never introduced to them before.
It’s also one of the key reasons I launched Wolfpack Wealth Management: to serve families like mine—people who didn’t grow up around financial planners or investment advisors, but who deserve access to smart, strategic, and accessible financial planning and advisory services. If you’ve ever wondered why start a 529 plan, let my story be a nudge: don’t wait. With rising costs and greater demands on today’s students, education planning is more important than ever. Start early, plan wisely, and know this—you’re not alone. You have someone in your corner who understands both the numbers and the journey.
That experience made me realize how powerful—and underused—529 Plans really are. So let’s break down exactly what a 529 Plan is and how it can help families save smarter.
Table of Contents
What is a 529 Plan and How Does It Help You Save?
A 529 Plan is one of the most powerful tools available for families looking to save for a child’s education. If you’ve ever wondered how a 529 Plan works, here’s the simple version: it’s a tax-advantaged investment account specifically designed to help you save for qualified education expenses—like tuition, books, room and board, and even some K–12 or apprenticeship costs.
These plans are named after Section 529 of the Internal Revenue Code and are sponsored by individual states. While you can invest in any state’s plan, many offer additional perks—like tax deductions or credits—if you choose your home state’s option.
So, how does it help you save? In a word: efficiency. When used properly, a 529 Plan can help your money grow faster and stretch further by reducing your tax burden.
Let’s explore how:
Tax-Free Growth and Withdrawals
One of the biggest tax benefits of a 529 Plan is that your contributions grow tax-free. That means you don’t pay taxes on interest, dividends, or capital gains—so long as the money is used for qualified education expenses. When it’s time to withdraw the funds for tuition, books, or even room and board, you won’t owe federal taxes on those distributions either.
In other words, you’re saving for college tax-free, which can significantly increase the long-term value of your investment compared to using a regular savings or brokerage account.
Some states, like Colorado, even sweeten the deal by offering a state income tax deduction on contributions made to their 529 Plans—putting even more money back in your pocket.
Who Can Open or Contribute to a 529 Plan?
Anyone can open a 529 Plan—not just parents. Grandparents, aunts, uncles, and even family friends can open an account or contribute to an existing one. You don’t have to be related to the student to help fund their education.
Even better, the account owner (typically the person who opens the plan) retains control of the funds, including how they’re invested and when they’re withdrawn. If the original beneficiary doesn’t end up using the funds, you can easily change the beneficiary to another qualifying family member.
This flexibility makes 529 Plans a valuable strategy for multi-generational families who want to give the gift of education—or even for adults returning to school themselves.
By understanding how a 529 Plan works, and how it helps you save for college tax-free, you’re taking a critical step toward smarter education planning. In the next section, we’ll explore how these savings can make college more affordable—and why starting now makes all the difference.
Now that we’ve covered how a 529 Plan works, let’s talk about what matters most—how it can actually help reduce the cost of college and ease the burden of student debt.Plan and its benefits.
How a 529 Plan Can Make College More Affordable
For many families, the rising cost of higher education can feel overwhelming. But with the right strategy, you can reduce the burden—and a 529 Plan is one of the most effective tools to do just that. Whether your child is just starting preschool or still just a dream for the future, a 529 Plan gives you a structured, tax-advantaged way to make college affordable without relying entirely on student loans.
At its core, a 529 Plan is designed to help families save in advance for future education costs. And the earlier you start, the more powerful it becomes—thanks to compound growth and tax-free withdrawals for qualified expenses.
Let’s break it down with a simple example:
If you contribute $250 per month into a 529 Plan from the day your child is born, and your investments earn an average annual return of 8%, you could accumulate over $120,000 by the time they turn 18. That’s enough to cover in-state tuition and fees at many public universities or a sizable portion of private school tuition.
But here’s something many people don’t realize—you can start even earlier.
When I work with clients who are planning to have children, I often recommend opening a 529 Plan before the child is born. I like to call this time The Golden Head Start—the window before your future child even exists, when your savings can begin compounding, undisturbed. And trust me, as someone who learned the hard way by starting my own plan too late, I’m doing things differently now.
Remember that 529 Plan I once used for a portion of my MBA at Pepperdine? I’ve since repurposed it for my future kids. I don’t have children yet—just my dog Teddy for now—but that account is already growing. When the time comes, I’ll be grateful I gave myself a head start. With tuition continuing to rise, those early contributions could make a huge difference in avoiding unnecessary debt.
That’s one of the most overlooked advantages of using a 529 Plan for college tuition: every dollar saved today is a dollar your child won’t need to borrow tomorrow. That means less student loan debt, fewer years of repayment, and more financial freedom for the next generation.
At Wolfpack Wealth Management, we help clients build personalized 529 strategies based on their goals, timeline, and values. Whether you’re a new parent, a parent-to-be, or just planning ahead like I am—this is one of the smartest, most future-focused decisions you can make.
Using a 529 Plan doesn’t just make college affordable—it makes your intentions clear. It says, “I’m thinking about your future before you’re even here.” That’s not just good planning—it’s love in financial form.
And if you’re exploring other ways to grow your child’s college fund, including custodial accounts, Coverdell ESAs, or flexible investment portfolios, check out this helpful article on college savings strategies and investing for your child’s education. It offers additional tools that can complement your 529 Plan and give you even more control over your education funding journey.
But not all 529 Plans are created equal. Where you live can impact your tax benefits and investment options. Let’s look at how Colorado and California stack up—and how to choose what’s best for your family.
Comparing State 529 Plans: Colorado vs. California
One of the most common questions I get as a CERTIFIED FINANCIAL PLANNER® professional is, “What’s the best 529 plan for my state?” And the answer is: it depends on where you live, how you file taxes, and what features matter most to your family.
Each state offers its own 529 Plan, and while you’re not limited to using your home state’s plan, some states provide tax incentives or specific investment features that make them especially attractive. Let's take a closer look at two plans I know well—CollegeInvest Colorado and ScholarShare California 529.
CollegeInvest Colorado
If you’re a Colorado resident, CollegeInvest Colorado offers a compelling combination of tax benefits and investment flexibility.
Here’s why:
State income tax deduction: Colorado taxpayers can deduct contributions to CollegeInvest plans from their state taxable income. This is one of the most immediate ways to reduce your tax burden while saving for your child’s education.
Low entry point: You can start with as little as $25, making it accessible for families at all income levels.
Diverse investment options: CollegeInvest partners with well-known financial institutions to offer a variety of age-based portfolios, index funds, and actively managed options.
If you're searching for the best 529 plan for my state and you live in Colorado, this plan checks many important boxes.
ScholarShare California 529
For those based in California—or for clients with family roots there—ScholarShare California 529 stands out for its simplicity, low fees, and high-quality investment options.
No state tax deduction: Unlike Colorado, California does not offer a state tax deduction for 529 contributions. However, the plan still allows for tax-free growth and withdrawals for qualified education expenses.
Low-cost structure: ScholarShare is known for its low fees, which means more of your money stays invested and growing.
Robust fund options: The plan includes both passive and active investment options, with portfolios tailored to different risk levels and time horizons.
Even without a tax deduction, ScholarShare California 529 is frequently ranked among the best nationwide due to its cost efficiency and long-term investment quality.
Choosing the Right Plan: More Than Just Tax Savings
Here’s an important insight I share with every client: if your state doesn't offer a tax benefit, you're usually better off choosing a plan with low fees and strong investment performance—like California’s ScholarShare. But if your state does offer a tax deduction or credit, even if the plan isn’t the lowest-cost or top-performing, that upfront tax incentive can still make it a valuable option.
Still not sure what’s best for your situation? Or don’t want to stress over comparing dozens of plans, fee structures, and fund options?
That’s exactly where working with a CERTIFIED FINANCIAL PLANNER® professional adds real value.
At Wolfpack Wealth Management, we take the burden off your shoulders. I dive into the complexities, run the numbers, and help you confidently choose a 529 Plan that aligns with your family’s financial goals—not just on paper, but in the real world. Because when you’re trying to save for your child’s future, the last thing you need is uncertainty.
From understanding the tax advantages to maximizing long-term growth potential, I help you make the right decisions—without the overwhelm.
Even with all these benefits, I’ve seen many families hesitate to open a 529 because of common myths and misunderstandings. Let’s clear those up.
Debunking 529 Plan Myths That Could Cost You
Despite their growing popularity, 529 Plans are still misunderstood by many families—and those misconceptions can cause people to delay or avoid using one entirely. As a CERTIFIED FINANCIAL PLANNER® professional, I often find myself clearing up these common 529 plan myths that hold families back from making informed, strategic decisions about their child’s future.
Let’s break down some of the most persistent myths and what you actually need to know.
What If My Child Doesn’t Go to College?
One of the most common worries I hear is, “What happens to the money if my child doesn’t go to college?”
Here’s the truth: 529 Plans are incredibly flexible. If your original beneficiary doesn’t pursue traditional college, the funds don’t go to waste.
You can:
Change the beneficiary to another qualifying family member—including siblings, cousins, or even yourself if you go back to school.
Use the funds for alternative education paths, such as trade schools, apprenticeships, or certain online degree programs.
Leverage the Secure Act 2.0 provisions to roll over unused 529 funds (up to $35,000) into a Roth IRA for the beneficiary, starting in 2024—no penalties, no taxes, just long-term retirement growth.
Even if no one ends up using the funds for education, you can still withdraw them. You’ll pay ordinary income tax and a 10% penalty on the earnings—but not on your original contributions. While that’s not ideal, it’s far from losing all your money.
Does a 529 Hurt Financial Aid?
This myth often scares parents into inaction. The short answer: not nearly as much as you think.
When it comes to financial aid and 529 Plans, here’s how it typically works:
If the 529 Plan is owned by a parent, only up to 5.64% of the account’s value is counted in the Expected Family Contribution (EFC) calculation for need-based aid.
In contrast, assets held in a child’s name (like UGMA/UTMA accounts) are assessed at 20%—so 529 Plans are much more aid-friendly.
Distributions from a parent- or student-owned 529 Plan are not counted as student income under current FAFSA rules, which helps protect eligibility for aid.
The bottom line: having a 529 Plan is usually more helpful than harmful when it comes to financial aid. In fact, not having one often leads to more student debt in the long run.
Can I Use Any State’s Plan?
Yes! One of the biggest 529 plan myths is that you're locked into using your home state’s plan—but in reality, you can use any state's 529 Plan, regardless of where you live or where your child plans to attend school.
Here’s why that matters:
Some states (like Colorado) offer tax benefits for residents who contribute to their own plan.
Other states (like California) may not offer a state tax deduction, but their plans may have lower fees or better-performing investment options.
You're also free to compare plans nationwide to find one that aligns with your priorities—whether it’s cost efficiency, fund selection, or performance history.
At Wolfpack Wealth Management, I help families evaluate which plan makes the most sense based on their state residency, tax situation, and long-term goals. So yes—you can (and should) shop around.
When it comes to saving for your child’s future, don’t let misinformation stand in your way. These 529 plan myths can be costly—but with the right knowledge and professional guidance, you can avoid common mistakes and build a smarter strategy.
If you’re ever unsure about how your savings may impact financial aid, how to handle unused 529 funds, or whether your state plan is the best fit, I’m here to walk you through it. No stress, no confusion—just personalized advice you can trust.
Feeling more confident about what a 529 Plan is—and what it isn’t? Great. Here’s how to open one and start saving today.
Step-by-Step: How to Start a 529 Plan Today
Now that you understand the benefits and flexibility of a 529 Plan, the next step is taking action. The good news? It’s easier than most people think. Whether you're a new parent, planning to have children someday, or even saving for a grandchild or niece, this 529 plan contribution guide will walk you through the process.
Here’s how to open a 529 Plan and start building your child’s college savings—step by step:
Step 1: Choose the Right 529 Plan for You
Start by comparing different state-sponsored 529 Plans. You’re not limited to your own state, but if your state offers a tax deduction or credit for contributions, that may be a big advantage.
Look at:
State tax benefits (if applicable)
Investment options and fees
Plan reputation and flexibility
If you’re unsure which plan is best, this is where working with a financial advisor or CERTIFIED FINANCIAL PLANNER® professional can save you time, money, and stress.
Step 2: Set Up the Account
Once you’ve selected a plan, you can usually enroll online within 15–20 minutes.
You’ll need:
Basic information about yourself (the account owner)
Information about the beneficiary (child, grandchild, etc.)
A funding method (bank account or payroll deduction)
You can even open a 529 Plan before your child is born—by naming yourself as the initial beneficiary and updating it later.
Step 3: Select Your Investment Options
Most plans offer two main choices:
Age-based portfolios, which automatically adjust risk levels as the child gets older
Individual portfolios, which give you more control over your investment strategy
Your selection should match your risk tolerance and timeline. For example, if your child is under 5, you may lean more aggressively toward growth. As college nears, your strategy should shift toward stability to preserve capital for withdrawals.
Both investment options have their advantages and disadvantages, depending on your goals, risk comfort, and how hands-on you want to be. That’s why reaching out to a financial advisor or CERTIFIED FINANCIAL PLANNER® professional can help tremendously. An advisor can clarify your options, optimize your investment mix, and ensure your 529 Plan works in harmony with your broader financial plan.
Step 4: Make Your First Contribution
Some plans allow you to start with as little as $25, making it easy to get going no matter your budget.
Decide whether you’ll make:
A lump-sum contribution
Monthly automatic deposits
One-time gifts from relatives (which is a great way for grandparents to help!)
Starting a college fund doesn't require a huge upfront investment—consistency is key. The earlier you start, the more time your savings has to grow tax-free.
Step 5: Review and Adjust Regularly
A 529 Plan isn’t something you set and forget. Life changes—your income may grow, your child’s education path may evolve, or better investment options may become available.
Make it a habit to:
Review your contributions annually
Rebalance your investments as needed
Ensure you’re still on track with your goals
At Wolfpack Wealth Management, I help families align their 529 strategy with the rest of their financial plan—so everything works together in one direction: toward your child’s future.
Starting a college fund today doesn’t have to be complicated. With a clear plan, the right tools, and professional guidance, you can build an education savings strategy that makes college more affordable—and empowers your family for generations.
If you’re ready to take the next step and want personalized help selecting and managing your 529 Plan, let’s connect. I’ll help you navigate the options and lift the complexity off your shoulders—so you can focus on what matters most: your child’s future.
As you’ve seen, there are a lot of moving parts in education planning. This is exactly where working with a financial planner can make a real difference.
The Role of a CFP® Professional in Education Planning
When it comes to saving for your child’s future, knowing where to start is often the hardest part. Between choosing the right 529 Plan, selecting investments, understanding tax rules, and balancing other financial goals, it’s easy to feel overwhelmed. That’s where a CFP® professional financial advisor for education savings becomes more than just helpful—it becomes essential.
As a CERTIFIED FINANCIAL PLANNER® professional, I specialize in helping families navigate the complexities of education funding strategies. My role is to simplify your decision-making, maximize your savings potential, and ensure that your education plan aligns with your overall financial picture—because your child’s future deserves more than guesswork.
Personalized Education Planning Help That Fits Your Life
Every family is different. Some want to fully fund college; others want to split costs with their child or prepare for trade schools or graduate programs. Regardless of your goal, a CFP® professional can provide tailored education planning help that reflects your values, budget, and time horizon.
Here’s how working with a CFP® professional can make a difference:
Plan selection clarity: I evaluate which 529 Plan is best for your situation based on taxes, fees, and flexibility.
Contribution strategy: I’ll help determine how much you need to save each month, and when to scale up or adjust.
Investment alignment: I guide you through selecting the right portfolio strategy based on your timeline and risk profile.
Ongoing adjustments: Life changes. Your education plan should change with it. I offer support at each life milestone—from a new job to a second child to changing college costs.
Whether you're a new parent, planning to have children, or already navigating high school decisions, a CFP® can ensure you're not just saving—but doing so strategically.
Taking the Stress Out of Education Planning
Most people don’t grow up with access to financial advisors—my family didn’t either. That’s one reason I founded Wolfpack Wealth Management: to offer accessible, personalized financial guidance for those who need it most. I know what it’s like to feel uncertain about the future, and I’m here to replace that with confidence and clarity.
With the right advisor by your side, education planning becomes less about spreadsheets and stress—and more about purpose and peace of mind.
If you’re looking for a CFP® professional financial advisor for education savings or just need some seasoned education planning help, let’s talk. I’ll help you build a plan that feels good, works hard, and supports your family’s future from day one.
And just when you think you’ve figured it out, the rules can change. Here’s what’s new with 529 Plans—and what’s coming in the future.
What’s New for 529 Plans and Beyond
As college costs continue to climb and education paths become more diverse, 529 Plans are evolving to meet the needs of today’s families. New laws and expanded use cases have made these plans more flexible and powerful than ever—making them not just a tool for tuition, but a strategic part of your overall financial plan.
Let’s take a look at the new 529 Plan rules in effect and what’s on the horizon for the future of 529s.
529 Rollover to Roth IRA (Secure Act 2.0)
One of the most exciting updates to 529 Plans came with the passage of the Secure Act 2.0, which allows for 529 rollover to Roth IRA starting in 2024. This provision addresses one of the biggest concerns parents and grandparents have: What if my child doesn’t use all the funds?
Now, unused 529 funds—up to a lifetime limit of $35,000 (may be subject to change)—can be rolled into a Roth IRA for the beneficiary, provided:
The 529 account has been open for at least 15 years
The rollover amount does not exceed the annual Roth IRA contribution limits
The amount rolled over consists of contributions (and earnings attributed to those contributions) made more than five years prior to the rollover
This update transforms the 529 Plan from a “use-it-or-lose-it” vehicle into a dual-purpose savings tool: first for education, and then for retirement. It’s a game-changer for families focused on long-term wealth building across generations.
New Eligible Expenses Expand the 529’s Use Case
Originally intended for higher education only, 529 Plans have steadily become more versatile. Recent changes now allow funds to be used for:
K–12 tuition (up to $10,000 per year per student)
Approved apprenticeship programs
Student loan repayment (up to $10,000 per beneficiary)
Vocational and trade schools, online degree programs, and more
This increased flexibility makes it easier for families to use 529 funds in a way that reflects the evolving landscape of education—not just traditional college.
These new 529 Plan rules are especially beneficial for students pursuing alternative career paths, or for parents unsure what type of post-secondary education their child may choose. Whatever path they take, you can be confident your savings are still usable and tax-advantaged.
The Future of 529s: Greater Accessibility and Innovation
Looking ahead, the future of 529s points to continued innovation. As lawmakers and financial professionals recognize the importance of adaptable education funding, we expect to see:
Greater employer involvement in 529 contributions (like 401(k) matching)
More user-friendly digital platforms and mobile apps
Expansion of allowable expenses tied to evolving education trends, such as remote learning and credential-based programs
At Wolfpack Wealth Management, I stay on top of these changes so you don’t have to. My goal is to make sure your education savings strategy is not only current—but also future-ready.
With new rules like the 529 rollover to Roth IRA, enhanced flexibility, and forward-looking opportunities, there’s never been a better time to integrate a 529 Plan into your broader financial plan. Whether you’re already saving or just starting out, keeping up with these updates can make a significant difference in the impact of your savings.
Let’s make sure you’re taking full advantage of today’s 529 options—while planning wisely for tomorrow.
We’ve covered a lot of ground—from how to open a 529 to new legislation and common myths. Let’s wrap things up with a few lasting insights you can carry forward.
Your Takeaways: Why a 529 Plan Is a Smart Way to Make College Affordable
If you’ve read this far, you already know: education is one of the greatest gifts we can invest in. And the earlier you begin, the more power that gift holds. As I shared at the beginning, my own family made incredible sacrifices to fund my undergraduate education—using rental property income to help me and my sisters attend school. I can still picture my dad heading out at midnight to handle a tenant emergency, often exhausted but determined, because he believed investing in our future was worth every sacrifice. We lost him in 2019—but the lessons he taught me about hard work, perseverance, and putting family first still guide me every day.
Today, with tools like 529 Plans, we can carry those values forward without carrying the same burdens. We can plan smarter. Save more efficiently. And honor the legacy of those who gave everything—by giving our own children the gift of choice, confidence, and a college education without the weight of unnecessary debt.
That’s part of why I do what I do today.
I used a 529 Plan myself to offset some of my MBA expenses, and now I’m continuing to contribute to that same account—not for myself anymore, but for my future kids (even though I don’t have any yet… just my fur-son, Teddy). This idea of starting in the so-called The Golden Head Start —before a child is even born—shows just how powerful time and planning can be.
So if you’re wondering why start a 529 Plan, the answer is simple: because every year you wait is an opportunity left on the table. With rising tuition costs, compounding investment growth, and tax-free advantages, a 529 Plan is one of the smartest education savings strategies available today. It’s not just about numbers—it’s about creating choice, reducing debt, and giving the next generation a stronger financial foundation.
Whether you’re putting away $25 a month or making larger contributions, the most important part is starting. You don’t need to have it all figured out. You just need to begin.
At Wolfpack Wealth Management, I help families turn their financial uncertainty into clear, confident action. We’ll review your options, tailor your strategy, and make sure your 529 Plan aligns with your long-term goals—because making college affordable shouldn’t be overwhelming.
Let’s make your child’s future one you can feel proud of.
Schedule your complimentary financial planning consultation today to learn how to start a 529 Plan, reduce student debt, and build a smart college savings strategy that aligns with your family’s goals.
