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How to make the most of leftover 529 college savings account money

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2 years ago

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As families try to offset the increasing cost of college education, many have turned to 529 college savings plans as a strategy. 

These accounts let families set aside money toward college expenses while taking advantage of tax breaks and compound interest, according to certified financial planner Preston D. Cherry, founder and president of Concurrent Financial Planning in Green Bay, Wisconsin. He is also a member of the CNBC Financial Advisor Council.

“If you start [investing] at the child’s birth, then you have 18 years to make money on top of money. And hopefully, that’s enough to outpace inflation of the price of college,” Cherry told CNBC. 

Families have invested $441 billion in such accounts as of the end of 2023, according to Morningstar, a 16% increase from 2022. When it comes to paying for college, 35% of families used 529 funds in 2024, according to Sallie Mae. For the average family, that money covered 9% of the cost of attendance.

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But what happens if you have leftover 529 funds?

“A student may get some scholarships or need-based financial aid. Or, sometimes, grandparents or other family members contribute to college expenses,” Cherry said.

Education choices can also result in a surplus. Figures show fewer students are earning bachelor’s degrees, while more are earning certificates due to growth of vocational programs.

Your unused money does not have to stay locked up in the 529 college savings account, Cherry said. Here are four ways to make the most of it: 

1. Roll funds into a Roth IRA 

Thanks to Secure Act 2.0, savers now have the ability to roll money from a 529 plan to a Roth individual retirement account, free of penalties or income tax. The measure, which took effect this year, gives Americans more flexibility with their 529 accounts. 

“We, meaning the parents, saved and invested for your college education,” Cherry said. “We have excess funds that we didn’t use for you, but we still want to benefit your life. So we’re going to roll it over from one compound tax-deferred vehicle, a 529, to another.

“One pays for your college, the other is an investment into your future retirement,” he added.

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This option has limitations, however.

To qualify for a transfer to a Roth IRA, the 529 account must have been open for 15 years. Plus, there is a lifetime cap on 529-to-Roth rollovers of $35,000. 

Depending on how much money you want to transfer, it may be a multiyear project. The conversion counts toward your annual IRA contribution limit. For 2024, that is $7,000 for investors under age 50.

2. Change the beneficiary 

If you feel certain the original beneficiary of the 529 plans will not need the leftover funds, say, for grad school, it is possible to change the account beneficiary to another “qualified family member.” That might include a sibling or step-sibling or parent, among other relatives, according to the IRS.

Changing a 529’s beneficiary does not trigger withdrawal fees or any tax penalty. 

3. Pay off student loans 

Another way to use leftover 529 funds is to pay off student loans, Cherry said. Under the Secure Act of 2019, savers can use funds for this purpose: up to $10,000 per year for each plan beneficiary, as well as for each of the beneficiary’s siblings. 

4. Withdraw the money outright 

As a last resort, Cherry said, families could withdraw 529 assets outright.

Your contributions can be withdrawn tax- and penalty-free, while any earnings not used for qualified expenses may be subject to income tax and a 10% penalty. An exception: If your child receives scholarships, you can withdraw up to the amount of that scholarship for nonqualified expenses without penalty.

This allows families to have immediate access to the money, rather than redirecting it to another account or putting it toward a qualified education expense. 

“They could use the monies for themselves, to fund their current lifestyle or transfer that money into another saving and investment account for the future,” Cherry said. 

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Navigating Residential Real Estate and Mortgage Strategy

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3 weeks ago

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August 15, 2026

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The 2026 residential real estate market presents a nuanced landscape for homebuyers, current homeowners, and property investors. With benchmark mortgage rates adjusting alongside Treasury yield movements, real estate strategies require careful evaluation of borrowing costs, local market supply dynamics, and long-term home equity management.

Adapting Homebuying Strategies to Mortgage Dynamics
Prospective homebuyers are adapting to fixed 30-year mortgage rates hovering between 6.0% and 6.8%. While borrowing costs are elevated compared to historical lows seen in prior decades, moderating home price growth across several regional markets is creating selective opportunities for buyers with strong credit profiles.

Homebuyers are increasingly utilizing strategic mortgage options:
– Builder Rate Buydowns: Purchasing new construction homes where developers offer temporary or permanent interest rate buydowns to lower initial monthly payments.
– Adjustable-Rate Mortgages (ARMs): Selecting 5/1 or 7/1 hybrid ARMs with strict rate caps for short-to-medium-term housing plans.
– Points and Financing Structure: Evaluating upfront discount point purchases to secure lower fixed interest rates over the loan term.

Home Equity Utilization and Renovation Financing
For existing homeowners holding low-rate legacy mortgages, moving to a new property often entails relinquishing favorable debt terms. Consequently, many homeowners are choosing to renovate and expand existing properties rather than sell.

Home Equity Lines of Credit (HELOCs) and home equity loans allow homeowners to access accumulated property equity for capital improvements without disturbing their primary mortgage rate. Utilizing home equity for value-adding property renovations can enhance living space while increasing long-term property values.

Strategic Real Estate Investment Guidelines
For residential property investors, achieving positive cash flow requires strict underwriting standards:
– Stress-Test Operating Expenses: Factor in rising property insurance premiums, local property taxes, and ongoing maintenance reserves.
– Focus on High-Growth Rental Markets: Target regions experiencing steady job growth and sustained tenant demand.
– Maintain Cash Buffers: Ensure property portfolios maintain dedicated emergency reserves to navigate unexpected vacancy periods or major repairs.

Actionable Homeownership Steps
1. Evaluate Complete Monthly Housing Costs: Assess property taxes, homeowners insurance, and HOA fees alongside principal and interest.
2. Leverage Renovation Equity Carefully: Utilize equity loans strategically for renovations that generate long-term property value.
3. Prioritize Credit Score Optimization: Secure top-tier credit scores prior to mortgage pre-approval to qualify for competitive lender pricing tiers.

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Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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4 weeks ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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4 weeks ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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