How to Money · Friday, September 11, 2026
Some individuals without children are reportedly contributing to 529 college savings plans to leverage tax advantages and potentially roll funds into Roth IRAs later. Hosts express skepticism about this strategy, citing limitations like a $35,000 lifetime cap and potential penalties, suggesting traditional brokerage accounts might be more suitable.
“Basically, folks, some of which who don't even have kids, are funding their 529s in an effort to optimize even more.”
“people are saying, I don't have kids yet. I'm not even thinking about going to get a graduate degree, but I'm funneling so much money into all of these other, maybe they're like how to make money diehards, Matt. And they're like, I'm doing the HSA to the max, the Roth IRA, the 401k. I'm doing it all.”
“You could also pay a 10% penalty if you don't end up using... if you don't use the money essentially for qualifying education expenses, it's a gamble, but I guess it's one that some personal finance optimizers are willing to take.”