The holiday season is more than festive lights and family traditions. It’s also a rare opportunity to gather loved ones and discuss meaningful plans for the future. One of the most impactful conversations you can have during this time is about education goals and how to fund them.
Why Start Now?
The holidays bring multiple generations together, making it the perfect setting to align family values with financial strategies. Whether you’re planning for a child’s college education, considering graduate school, or exploring trade programs, these discussions help ensure everyone is on the same page.
Define Your Education Goals
Before diving into numbers, start with the big picture:
- What type of education does your student aspire to – college, trade school, or advanced degrees?
- Are there specific schools or programs in mind?
- What timeline are you working with?
Clarifying these goals provides a roadmap for how much to save and which strategies make sense.
Review Current Savings Plans
Year-end is an ideal time to check in on existing education accounts:
- 529 Plans: Consider making additional contributions before December 31 to maximize state tax benefits. Contributions to 529 plans are also removed from your taxable estate, making them an excellent wealth transfer tool for families looking to reduce estate taxes while funding education.
- Custodial Accounts: Ensure they align with your overall financial plan and tax strategy.
Incorporate Gifting Strategies
The annual gift tax exclusion is currently $19,000 per person in 2025. Holiday gifting can double as education funding. Grandparents and relatives can contribute to 529 plans without triggering gift taxes.
Take Advantage of New Rules
Recent updates under SECURE Act 2.0 allow unused 529 funds to roll into Roth IRA accounts (up to $35,000 lifetime), adding flexibility to your planning. This change makes education savings even more versatile.
Education planning isn’t just about saving money, it’s about creating opportunities and supporting dreams. This holiday season, take advantage of the time together to start the conversation. If you have any questions, please don’t hesitate to reach out to a member of our team for further discussion.