Latest / The College Savings Podcast with Fexingo: 529 Plans, Education Funding, and Student Costs
The College Savings Tax Trap Families Miss
Most families assume their state tax deduction on 529 plans is a guaranteed win, but the reality of 'lock-up' rules and changing residency can turn that benefit into a liability. In this episode, we look at the specific case of a family who moved states mid-plan and lost their initial contribution match, plus the math behind why some states offer clawbacks for early withdrawals. We break down how to structure contributions to maximize current tax benefits without trapping your liquidity, using real examples from Ohio and Pennsylvania to show where the loopholes actually are…
The skinny
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