Education funding
You want to give your kids a strong start, and you can't borrow your way into a retirement. A good plan funds both in the right order, with accounts that keep their options open as life changes.
Book a 15 to 30 minute call
Parents usually bring me an account question: which 529, how much, whose name goes on it. Underneath sits a harder question: how much can we do for the kids without shorting our own future? Settle that one first and every account decision downstream gets easier.
I'm a dad saving for two educations myself, so none of this is theoretical for me. There's a reason most planning frameworks put retirement funding ahead of tuition: college has loans, grants, and scholarships, and retirement has none. Where that leaves your family depends on where your retirement plan stands today. The reasons are below, and they're kinder than they sound.
Retirement first, then college, and the order is a kindness rather than selfishness. Your kids can borrow for school, earn scholarships, or choose a cheaper path. Nobody will lend you a retirement. Securing your own future also means your children never have to carry it for you later, which may be the best financial gift there is.
In practice we set a split you can keep: retirement contributions locked in first, then a monthly education amount that survives braces, daycare, and the minivan years. A modest number you never pause beats an ambitious one you abandon every other January.
Forget the scary national averages. The useful number is a range built from schools your family would actually consider: in-state public, private, a program with likely merit aid. We price a scenario or two, subtract what cash flow and aid might cover, and the remaining gap becomes your savings target.
The exercise takes an evening. We pick two or three plausible paths, price them at today's costs, adjust for the years until freshman year, and decide how much should come from savings versus future cash flow. You end up with a number your family chose, reviewed yearly, instead of dread with a decimal point.
Gratefully accepted, and worth coordinating before the accounts get opened. Grandparents can open their own 529, contribute to yours, or simply hold the money and help later. Each route has different control, tax, and financial-aid consequences, so a short conversation up front saves untangling later. The goal is that generosity lands the way everyone intended.
Three accounts now compete for a child's savings, and each runs on entirely different tax rules. A 529 rewards money that ends up spent on education, a UTMA custodial account rewards flexibility, and a Trump Account, new in 2025, is essentially a traditional IRA for a child. The right mix depends on what the money is most likely to become.
| Account | How it's taxed | Access and flexibility | Often fits when |
|---|---|---|---|
| 529 plan | Growth is tax-free when spent on qualified education, and you keep control as the owner. | Change the beneficiary to family, or roll up to $35,000 into the beneficiary's Roth IRA once the account is fifteen years old. Non-qualified withdrawals owe tax and a 10% penalty on earnings only. | Education is the likely goal. For most families, this is the first account to fund. |
| Trump Account | Essentially a traditional IRA for a child. Contributions are after-tax, growth is tax-deferred, and withdrawals are taxed as ordinary income on everything above what you contributed. | Capped at $5,000 a year and locked until age 18, after which standard IRA rules apply, with a 10% penalty before 59½ unless an exception applies. It can convert to a Roth IRA after 18. | You want the one-time $1,000 federal seed and any employer contributions, or you're seeding a child's eventual retirement. |
| UTMA custodial | A taxable account in the child's name. Long-term gains are taxed at low capital-gains rates, with kiddie-tax rules on larger amounts while the child is young. | No limits on how it's used, but no take-backs: the money becomes the child's outright at your state's set age. | The gift is for a first home, adulthood in general, or a goal you can't name yet, and flexibility counts for more than an education-only break. |
Which one comes out ahead depends above all on what the money ends up paying for. The Trump Account vs. 529 vs. UTMA calculator runs your own numbers across college, a first home, and general use, and lays the after-tax result of each side by side. It's the fastest way to see which account fits your family's most likely path.
For most families the order is usually simple: fund the 529 first up to what education is likely to cost, use a UTMA for money meant for a first home or a goal you can't name yet, and treat the Trump Account mainly as a home for its free $1,000 seed and any employer contributions. Piling extra out-of-pocket savings into a Trump Account often backfires, since it turns what would have been low-taxed growth into ordinary income and ties the money up until 18. One bright spot: after 18 it can be converted to a Roth IRA, which makes it a surprisingly effective way to seed a child's retirement. Living in Florida removes a wrinkle families in some states face, since there's no state income tax to complicate any of the three.
Jesse Plunkett, CEPA®, CRPC®
Financial advisor in Sanford, FL, serving clients across the country virtually. Meet your advisor, or check my record on 
.
A quick, useful starting point
1. Named beneficiaries override your will Beneficiary listings on investment accounts override your will entirely. Named an ex-spouse or a late parent? They still inherit, no matter what your will says…
A short, low-key call. Tell me your kids' ages and what you'd like to do for them, and we'll sketch the order of operations together.
More options than the account's reputation suggests. You can change the beneficiary to another family member, including yourself. Under SECURE 2.0, up to $35,000 can move to the beneficiary's Roth IRA over time, once the 529 has been open fifteen years. If you simply withdraw, tax and a penalty apply to the earnings portion only, never your contributions.
It comes down to what the money is for. A 529 wins when education is the goal, with tax-free growth and the option to change beneficiaries or roll leftovers to a Roth IRA. A UTMA fits a first home or general use, taxed at low capital-gains rates but handed to your child at your state's set age. A Trump Account is a child's traditional IRA, best used to capture its free $1,000 seed and any employer money rather than extra savings, since all of its growth comes out as ordinary income. Run your own comparison with the Trump Account vs. 529 vs. UTMA calculator.
A Trump Account is a new type of traditional IRA for a U.S.-citizen child under 18, created by 2025 law, with a one-time $1,000 federal seed for eligible children. Families can add up to $5,000 a year, including up to $2,500 from an employer, invested in a low-cost US stock index fund. The money is locked until 18, then follows traditional IRA rules: your contributions come back out tax-free, but all growth is taxed as ordinary income. Its sweet spot is the free seed and employer money, plus an eventual Roth conversion toward the child's retirement.
Rarely, and only with a plan to catch up. The years you'd pause are often your highest-earning years, when retirement contributions do the most compounding. Before touching retirement savings, we look at cheaper levers: adjusting the school list, merit aid, cash-flowing part of the cost, and modest borrowing. Your kids have more funding options than your retirement ever will.
Earlier is easier, but later is workable. Money saved in the first few years of a child's life gets the longest run of tax-free compounding, so small early amounts carry surprising weight. If your kids are older, the plan shifts toward cash flow, school selection, and aid strategy rather than compounding. Wherever you're starting, start from there.
Less than they used to. Under FAFSA simplification rules in effect since the 2024-25 school year, distributions from a grandparent-owned 529 no longer count as student income, which removed the penalty for grandparent help. Some private colleges use their own aid forms and may still ask. Rules here shift, so we check before relying on them.
Almost always. Everything is handled virtually, so where you live is rarely a barrier. The only exception is a handful of states where I'm not registered yet, and if that's you, I'll tell you on our first call.