Aspyre Wealth’s Jamie Bosse spoke to Financial Planning Magazine about common challenges she sees when helping clients with 529 plans. Jamie specifically addressed the difficulties that can arise with some plans when clients use 529s to fund K-12 private school.
Using 529s to pay for private school
Another challenge arises when clients use 529s to fund K-12 private school, according to Jamie A. Bosse, a financial planner at Aspyre Wealth Partners and author of the personal finance book “Money Boss Mom.”
“In theory, it’s great to be able to funnel the tuition through the 529 plan, get the tax deduction for the contribution (if your state allows), then pull it right back out to pay your private school tuition,” said Bosse, who specializes in working with young parents. Since the pandemic, many private schools have seen a rise in enrollment. “However, some plans make this difficult.”
“Ideally, if you’re taking the funds right back out, you don’t want them invested — it’s better to keep them in a money market-type holding.”