Why 529 Plans Are Overrated - Ep 107

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In this episode, Justin and Jared discuss why they think 529 plans are overrated. We discuss the 529 to Roth rollover provision, the state income tax deduction, and the tradeoffs and benefits of locking funds into an account earmarked for education funding.

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• The podcast emphasizes the necessity of understanding the implications of funding 529 plans and their relative value compared to other investment vehicles.
• Listeners are informed that the tax advantages associated with 529 plans may not be as significant for individuals residing in states without income tax.
• The hosts contend that the timing of contributions to 529 plans greatly influences their effectiveness, highlighting the importance of starting early to maximize growth.
• The discussion reveals that having multiple beneficiaries can mitigate the risks of overfunding a 529 plan, making it a more adaptable financial tool for families.
• The podcast highlights the complexity of the financial landscape surrounding education funding, suggesting that families assess their unique situations before making decisions about 529 plans.
• The hosts advocate for a careful analysis of how discretionary dollars are allocated, particularly in relation to retirement funding and educational expenses.

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‍Disclosure: This information is for informational purposes only. Nothing discussed during this video should be interpreted as tax, legal, or investment advice. If you have questions pertaining to your specific situation, please consult the appropriate qualified professional.