Building Bright Futures – Smart Education Planning for Families
Presented by Retirement GPS – Navigated by Zynergy
Why Education Planning Matters
For many families, retirement planning isn’t just about making sure you’re taken care of—it’s also about helping the next generation get a strong start. College costs continue to rise, and without a plan, families often scramble at the last minute to cover tuition. But with the right tools, you can invest in your child’s or grandchild’s future in a way that’s flexible and tax-efficient.
1. 529 Plans: The Core of Education Planning
Think of a 529 like buying a movie ticket ahead of time. You pay early, lock in your spot, and when it’s time for the show—college—you walk right in without stress.
529s allow money to grow tax-deferred and come out tax-free when used for qualified education expenses. They’re also far more flexible than many people realize:
- Up to $10,000 per year can be used for K-12 tuition.
- Graduate school costs are eligible.
- Up to $10,000 can be used to repay student loans.
- If funds aren’t used, the beneficiary can be changed—or in some cases, leftover money can even be rolled into a Roth IRA.
This flexibility helps families avoid the biggest fear: “What if I overfund it?”
2. Gifting to Grandchildren
Grandparents often ask: what’s the best way to help?
- Annual Gifts: In 2025, you can contribute up to $19,000 per year per person (or $38,000 for a couple) into a 529 without triggering gift taxes.
- Superfunding: You can front-load five years’ worth of gifts at once—up to $95,000 from one grandparent or $190,000 from a couple—allowing the money to grow for longer.
- Direct Tuition Payments: Paying tuition directly to a school does not count as a taxable gift, no matter the amount. While this doesn’t cover room and board, it’s an efficient way to contribute without using up your gift exclusion.
3. Tax-Efficient Strategies
Coordination matters. You can’t double-dip by using the same education expenses for both a tax-free 529 withdrawal and an education tax credit like the American Opportunity Credit. Plan ahead so you maximize both.
Another win for families: recent changes to the FAFSA mean that distributions from grandparent-owned 529s no longer count as student income, removing a major roadblock to financial aid eligibility.
Bringing It Together
Education planning isn’t about writing a blank check—it’s about giving the next generation choices. Whether it’s through steady annual gifts, a large upfront contribution, or direct tuition payments, the earlier you start, the more powerful the impact. Every dollar you set aside sends a message: I believe in your future.
Action Steps
- Decide how you want to help. Will it be steady contributions, a one-time superfunding gift, or direct tuition payments?
- Open or review a 529 plan. Make sure it’s invested appropriately and the beneficiary is up to date.
- Explore your options. If you’re unsure which 529 plan makes the most sense, do your research—or reach out to us at Zynergy for guidance.
Helping with education costs is one of the most meaningful legacies you can provide. With smart planning, you can support the next generation—without sacrificing your own retirement security.
Listen to Episode 10 of the Retirement GPS Podcast for a deeper dive into these strategies.