529 Plans and Student Loan Refinancing Strategies

In this episode, Lucas and Luna explore how 529 plans can be used strategically for student loan refinancing, a topic that many families overlook. They discuss the SECURE Act 2.0 provisions that allow up to $10,000 in penalty-free 529 withdrawals for qualified student loan repayments, including refinanced loans. Lucas explains the nuance of refinancing private loans versus federal loans, noting that refinancing federal loans means losing income-driven repayment options. Luna brings up the case of a listener who used a 529 to refinance her daughter's private law school loans, saving over $3,000 in interest. They also cover the state tax implications, as some states treat 529 withdrawals for loan repayment as non-qualified. Finally, they touch on the 2026 Roth IRA rollover option as an alternative for unused 529 funds. The episode is anchored by a specific example: a family with $25,000 in leftover 529 assets after a child graduates, weighing whether to save on state taxes now or roll into a Roth IRA for retirement. #529Plans #StudentLoans #Refinancing #SECUREAct2 #RothIRARollover #EducationFunding #Finance #CollegeSavings #StudentDebt #FexingoBusiness #BusinessPodcast #LucasAndLuna #TaxPlanning #LoanRepayment #PrivateLoans #FederalLoans #InterestSavings #PodcastEpisode Keep every episode free: buymeacoffee.com/fexingo