As a general rule, there are no age limits for 529 plans. An adult of any age can start their own 529 plan, serving as both account holder and beneficiary. As long as the expenses are used for post-secondary education (or qualifying K-12 tuition), 529 beneficiaries can be of any age.
Some state plans set their own regulations about the age of the beneficiary on prepaid 529 plans. Other plans have penalties for making a withdrawal before the account is a certain age or the investment has reached maturity. If you are saving in a 529 plan and plan to use the money in the next one to three years, check the conditions and penalties of withdrawal.
What is the Minimum Age to Start a 529 Plan?
There is no minimum age requirement to start a 529 plan. You can start a 529 plan for your child or grandchild as soon as you as you receive the Social Security number. Many parents and grandparents start 529 plans for their children or grandchildren at birth, and experts recommend it. Starting early allows you to start the account at the same time for each child, contribute the same amount, and give the account enough time to accrue earnings before college.
What is the Maximum Age to Start a 529 Plan?
An individual of any age can start a 529 plan, even after earning a college degree. Starting a 529 plan is a great way to save on lifelong-learning opportunities. If you don’t use all of the account funds, you can transfer money in the account to an eligible relative, such as a niece, nephew, or grandchild attending college. Here are a few ways that you can use a 529 plan after college:
Save for professional development programs, including certificates
Earn a qualification in a lifelong passion, such as attending a golf academy
Take an auto repair course to learn how to repair your vehicle
Start a second career in retirement, such as massage therapy
Pursue a creative program, such as graphic design or cosmetology
A variety of post-secondary opportunities are available to individuals of any age, and you can use the 529 plan to pay for them as long as the institution is eligible to participate in the federal financial aid program. You can search for schools on the FAFSA website.
How Long do You Have to Use a 529 Plan?
Once a 529 plan is opened, you don’t have a ticking clock. You can take your time. Some beneficiaries choose not to use their plan right away, taking a gap year after high school or working for three to five years before attending college. After college, a beneficiary can transfer funds to a parent or grandparent to attend a post-secondary program of their choice.
It’s important to note that regardless of how long the account is open, the rules stay the same—money in a 529 account can only be used for educational expenses. The account cannot be converted to a retirement account like an IRA or 401K. You can withdraw money for other purposes, but it will be subject to a 10% penalty and income tax.