{"id":69037,"date":"2026-04-04T13:23:12","date_gmt":"2026-04-04T13:23:12","guid":{"rendered":"https:\/\/diyhaven858.wasmer.app\/index.php\/why-an-expert-financial-planner-is-boycotting-529-accounts-for-his-childrens-education\/"},"modified":"2026-04-04T13:23:12","modified_gmt":"2026-04-04T13:23:12","slug":"why-an-expert-financial-planner-is-boycotting-529-accounts-for-his-childrens-education","status":"publish","type":"post","link":"https:\/\/diyhaven858.wasmer.app\/index.php\/why-an-expert-financial-planner-is-boycotting-529-accounts-for-his-childrens-education\/","title":{"rendered":"Why an expert financial planner is boycotting 529 accounts for his children\u2019s education"},"content":{"rendered":"
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For many American families, 529 plans are considered a cornerstone of responsible financial planning.<\/p>\n
By mid-2025, Americans held a record of roughly $500 billion in these tax-advantaged accounts designed specifically to fund education expenses, according to Empower (1). But not everyone is convinced these accounts are the best option, including longtime financial planning expert David Blanchett.<\/p>\n
Blanchett prefers to save money for his four children in regular investment accounts that incur capital-gains taxes when assets are sold. For him, the freedom to decide how the money is ultimately used outweighs the benefit of tax savings (2).<\/p>\n
The main selling point of 529 plans is that investments grow tax-deferred and withdrawals are tax-free when used for qualified education expenses (3). But that benefit comes with strings attached. Withdraw funds for anything else and you\u2019ll typically face income taxes, plus a 10% federal penalty on earnings (4).<\/p>\n
For Blanchett, that restriction is a dealbreaker. While 529 funds aren\u2019t locked away, it may not make financial sense to use them if the money isn\u2019t guaranteed to go toward education.<\/p>\n
Standard brokerage accounts don\u2019t carry those constraints, allowing Blanchett \u2014 who isn\u2019t convinced a degree is necessarily the best way to help his children \u2014 to use savings freely for tuition or other priorities, like buying a house or emergencies, without repercussions.<\/p>\n
\u201cWe are actively saving money that we may use for college,\u201d he told the Wall Street Journal (2). \u201cBut not necessarily.\u201d<\/p>\n
Blanchett\u2019s personal experience also shaped his thinking. He and his wife had to pay off more than $400,000 in student debt, and by the time they could start saving, their oldest was close to college age, reducing the appeal of a 529\u2019s tax advantages.<\/p>\n
Some people in Blanchett\u2019s position might have pushed to save sooner, even when they couldn\u2019t really afford to. But Blanchett believes securing the parents\u2019 finances should be the first priority.<\/p>\n
\u201cThe best thing we can do for our kids is to be very stable financially and have lots of emergency savings,\u201d he said.<\/p>\n
Blanchett isn\u2019t alone in his skepticism with 529s, as other parents are also reconsidering how \u2014 and whether \u2014 to prioritize college savings for their children.<\/p>\n<\/p><\/div>\n