College Savings Plans (529s)

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Hey Coach,

College feels expensive because… it is.
But the earlier you prepare, the easier it becomes - just like player development.

The good news? There’s a simple, tax-advantaged tool built for families, including coaches:
the 529 college savings plan.

Let’s break it down so you know how it works, why it’s valuable, and who should consider using one.

1. What Is a 529 Plan?

A 529 plan is a tax-advantaged investment account designed to help you save for education expenses - primarily college, but also K-12 tuition, apprenticeships, and even student loan repayment.

Think of it like a Roth IRA for education:
You contribute money → it grows tax-free → withdrawals are tax-free when used for qualified education expenses.

Qualified expenses include:

• Tuition

• Room & board

• Books

• Fees

• Computers & required supplies

• Apprenticeship program costs

• Up to $10,000 toward student loans

2. Tax Benefits (The Real Advantage)

529 plans offer three major tax wins:

⭐ 1. Tax-free growth

Your investments compound without taxes slowing them down.

⭐ 2. Tax-free withdrawals

As long as the money is used for qualified education expenses.

⭐ 3. Potential state tax deductions

Most states give you a state tax deduction or credit for contributions.

This is why 529s are a powerful tool for families - the tax benefits alone can save thousands.

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3. How 529 Plans Work

Here’s the simple playbook:

Step 1 - Open a 529 account

You can choose your state’s plan or any other state’s plan - you’re not locked in.

Step 2 - Choose how to invest

529s offer age-based portfolios (like target-date funds), which get more conservative as the child nears college.

Step 3 - Contribute over time

Even small monthly contributions add up, especially with tax-free compounding.

Step 4 - Use the funds for education

Withdraw tax-free when the student incurs qualified expenses.

4. Who Should Consider a 529?

• Parents

Coaching families who want to prepare for college costs proactively.

• Grandparents

A common gifting strategy - especially for birthdays and holidays.

• Coaches who want to fund their own future education

529s can be used for your graduate degree or certification programs.

• Anyone planning long-term education savings

Even if college isn’t certain, 529s are flexible.

5. What If Your Child Doesn’t Go to College?

Good news - the money isn’t locked.

529 funds can be redirected to:

• Another child

• A grandchild

• Yourself

• A spouse

• Any family member

Plus, you can use up to $35,000 (lifetime limit) to roll unused 529 funds into a Roth IRA for the beneficiary (under specific conditions).

Flexibility + options = less fear about “wasting” the money.

6. How Much Should You Save?

Here’s a simple framework:

🏀 The Coach’s 3-Level Savings Model

LEVEL 1: Foundation
$25–$100/month - builds a meaningful base over time.

LEVEL 2: Competitive
$100–$250/month - helps cover a large portion of future tuition.

LEVEL 3: Full Court Press
$250–$500+/month - targets significant or full tuition support.

Every family is different - but something is always better than nothing.

7. 529 vs. Other Options

The 529 is usually the most efficient education savings tool.

Final Whistle

Here’s your simple 529 game plan:

✔️ Open a 529 - any state’s plan is fine
✔️ Use age-based portfolios for simple investing
✔️ Contribute what you can, consistently
✔️ Enjoy tax-free growth + tax-free withdrawals
✔️ Stay flexible - unused funds can be repurposed

Saving for college isn’t about perfection - it’s about progress.
The earlier you start, the easier the future looks.

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Coach Mike Klinzing
Founder, Wealth4Coaches
"Coach smarter. Save better. Live freer."