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The New 529 Tax-Free "Grandparent Loophole" for College Savings Just Got Updated


College graduate celebrating earning her degree after using the 529 plan and grandparent loophole to save

Episode Summary:


In this episode of Financial Advisors Say the Darndest Things, host AB Ridgeway shares insights on the evolving landscape of college planning and the newly revised rules surrounding 529 education savings plans. With changes aimed at making higher education more accessible, Ridgeway discusses the "grandparent loophole" and how it benefits individuals saving for their children's or grandchildren's education. Exploring the intersection of financial planning and Christian stewardship, Ridgeway emphasizes the importance of wise investment strategies aligned with biblical principles.


Key Takeaways:


  1. 529 Plan Enhancements: Congress has introduced significant upgrades to 529 education savings plans in 2024, allowing for tax-free rollovers of leftover savings and enhanced flexibility in using funds for retirement savings. This provides families with a valuable tool for both education funding and long-term financial planning.

  2. The Grandparent Loophole: The "grandparent loophole" allows non-parent individuals, including aunts, uncles, and family friends, to contribute to 529 plans without negatively impacting financial aid eligibility. This loophole offers greater financial flexibility for families and encourages early savings for education expenses.

  3. Investment Strategy: Ridgeway emphasizes the importance of investing contributions to 529 plans wisely, rather than leaving funds stagnant in cash accounts. By adopting a proactive investment approach, individuals can maximize growth potential and better prepare for future educational expenses.

  4. Financial Stewardship: Integrating Christian principles into financial planning, Ridgeway underscores the role of stewardship in managing resources effectively. Aligning investment decisions with biblical values ensures responsible financial management and honors God's provision.

  5. Adaptability and Planning: With changes in educational trends and career paths, Ridgeway highlights the need for adaptability in financial planning. By leveraging tools like 529 plans and Roth IRAs, individuals can navigate uncertainties and build a solid foundation for their children's future while honoring God's timing and blessings.

Quotes:

  1. "The grandparent loophole offers families a valuable opportunity to save for education without jeopardizing financial aid eligibility."

  2. "Aligning investment decisions with biblical principles ensures that we honor God's provision and steward our resources wisely."

  3. "Investing contributions to 529 plans is essential for maximizing growth potential and preparing for future educational expenses."

Conclusion: In this episode, AB Ridgeway provides valuable insights into college planning and financial stewardship, emphasizing the importance of aligning investment strategies with biblical principles. By leveraging tools like 529 plans and embracing adaptability in financial planning, individuals can navigate educational expenses while honoring God's provision and blessings.


Prayer:

Dear Lord, we come before you with gratitude for the resources you provide and the opportunities for financial stewardship. Guide us in making wise investment decisions that align with your will and honor your provision. Help us to steward our resources responsibly, preparing for the future with faith and discernment. May our financial planning reflect our commitment to glorifying you in all aspects of our lives. Amen.


KeyWords:


  1. College planning

  2. 529 plans

  3. Financial stewardship

  4. Investment strategy

  5. Christian finance



retired couple reviewing their investments

 

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About Financial Advisors Say The Darndest Things Podcast:


As Christians, we were taught to be good stewards over our tithing and giving to the less fortunate. But when it came to our personal finances and investing we were left clueless on what the Bible says. What does the Bible say about managing debt, leaving a legacy, investing, and planning for your retirement? Mr. Christian Finance answers these and many other questions because we want to teach you how to become rich and righteous!


Meet A.B. Ridgeway:


A.B. Ridgeway with his hands up

A.B. Ridgeway, MBA (info@abrwealthmanagement.com) is the owner and Christian Financial Advisor with A.B. Ridgeway Wealth Management. With a decade in the finance industry, his goal is to give believers clarity around the most confusing topic in the Bible, money, and tithing. A.B. Ridgeway helps tithing Christians become cheerful givers but unlocking their money-making potential, so they can prosper and be the great stewards of the wealth God has entrusted them with.


*Disclaimer: This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. This is strictly for information purposes. We recommend you speak with a professional financial advisor.

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