Not Just Kid Stuff: Why Mom Might Want a 529 Plan, Too

By Jaime Levy Pessin, Wall Street Journal

Funding a child's higher education isn't the only thing parents can do with a 529 college-savings plan: They also can use it to pay for their own schooling.

While parents and grandparents typically set up these tax-advantaged investment vehicles for the benefit of college-bound kids, 529 plans can be set up in an adult's name, too. If a parent or other adult is considering a career change, or just wants to take some continuing-education courses at a local college, it may make sense to set aside money that could grow tax-free and perhaps provide a state income-tax deduction.

Still, 529 plans don't have to be used for career-specific education, according to college-savings experts. As long as a school offers postsecondary education and its students can apply for federal financial aid, money from 529 plans can be used to offset qualifying tuition and fees. So if Dad wants to perfect his coq au vin at the French Cuisine Boot Camp offered by the Culinary Institute of America—an institution that meets the criteria—it may be worth consulting with a tax adviser to see if the $2,095 tuition could be pulled out of a 529 fund.

To be sure, 529s intended for later-in-life education aren't that common. More common, are young adults who start 529s for themselves because they plan to go to graduate school in a few years.

Funds that go unused in a 529 plan set up for a child can be redirected for use by a parent. The reverse also is true: A fund set up for an adult can be redirected to another family member.

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