Sound familiar?
This successful executive had done everything right in her career. But when it came to college planning, she felt like she was flying blind. If you’re reading this, you might feel the same way.
Why Successful Professionals Feel Uncertain About College Planning
We work with accomplished professionals every day. Lawyers, doctors, business owners. People like you who make complex decisions for a living. Yet when it comes to funding your children’s education, many of you tell us the same thing: “I don’t know what I don’t know.”
And honestly? That makes perfect sense.
College planning isn’t just about saving money. You’re juggling competing priorities while life keeps throwing curveballs.
The biggest “mistake” people worry about? Starting too late. But here’s the thing – even if you’re behind the eight ball, you’ve got options. Starting early gives you more wiggle room, but even if you’re behind, our team can work with your timeline.
The real trap is overfunding a 529 plan. There are actual penalties if your child doesn’t use the money for education but not until the funds come out. We’ve seen parents with massive 529 balances who later realize their kids might not even go to college.
What makes this especially confusing is that every family’s situation is different, but most advice treats college planning like a one-size-fits-all problem. The financial media tells you to max out 529s. Your neighbor swears by something else entirely. Meanwhile, you’re wondering if any of it applies to your specific circumstances.
The One Conversation That Simplifies Everything
Before we dive into numbers or account types, we start with a different conversation. Our team explores how you actually feel about funding your kid’s education.
Some parents want to cover all of the costs because they don’t want their child graduating with debt. Others prefer to go halfway, believing kids should have some skin in the game. Some want to focus on your own financial security first and worry about college later.
There’s no wrong answer. But there is a wrong approach: assuming you have to follow someone else’s playbook.
We’ve worked with parents who had significantly overfunded their first child’s 529 while barely starting one for their younger child. The conventional wisdom would call this a mistake. But when our team analyzed their family’s total education costs, they had enough for both kids. The 529 rules let you transfer balances between children, or anyone in your immediate or extended family. It turned out that their “mistake” wasn’t really a mistake at all.
This is why our team starts with priorities. Where does education funding rank among everything else you’re trying to accomplish? Once we understand that, we can build a plan that makes sense for your situation, and you’ll actually feel confident about the decisions we’re making together.
How to Navigate Major Life Changes While Planning for College
Major life changes don’t wait for convenient timing. We’ve seen clients dealing with aging parents, job changes, and divorce all while trying to figure out college funding.
When life gets complicated, our team brings fresh perspective to what can feel like an overwhelming situation. Instead of adding stress, we help you step back and see the bigger picture.
Consider the executive expecting significantly higher earnings during her children’s college years. With increased cash flow on the horizon, she could pay tuition directly instead of relying entirely on college savings accounts. Another approach? Fund partially now and bridge any gaps with the stronger income streams when college bills actually arrive. Or the client going through divorce who suddenly has half the household income but the same education goals. We completely reset the conversation. What can you realistically do now? What are your ex-spouse’s intentions? How do we make this work with your new reality?
The key is staying flexible. Life changes, and your college funding strategy needs to change with it. Having a dedicated team means someone is always thinking ahead to what might be important for you before you might consider it yourself.
The Tax Strategy Most Advisors Overlook
Here’s something that surprises many of you: where you live can dramatically impact your college funding strategy.
If you’re in Illinois, contributing to the state 529 plan can give you a significant tax deduction. We have clients there who are able to reduce their tax bill annually by making contributions to that plan. The deduction can be substantial – we’re talking about real money that stays in your pocket instead of going to the state.
But if you’re in Florida, which has no state income tax, we might recommend Utah’s 529 plan because we believe it offers better investment options. Without the tax deduction factor, we can focus purely on which plan gives your money the best chance to grow over the years before your child needs it.
These decisions matter more than you might think. The right state plan can save you thousands in taxes over the years you’re contributing. But most financial advisors never mention this because they’re focused on investment returns, not tax efficiency.
What makes this even more important is that successful professionals like you are usually in higher tax brackets where these deductions pack more punch. A deduction that saves a moderate earner a few hundred dollars might save you significantly more. Yet somehow this basic tax planning gets overlooked in most college funding conversations.
Our team looks at your tax situation first, then builds the college funding strategy around it. When we know where you live and what your tax picture looks like, we can recommend the approach that makes the most sense for your specific circumstances.
Creative Funding Strategies Beyond 529 Plans
Everyone assumes college planning means 529 plans, but we may use multiple strategies depending on your situation.
In certain situations, we recommend using a trust account for minors (UTMAs) to work alongside their 529s. The 529 covers the major expenses, such as tuition and room and board while the trust account covers all the other expenses that keep adding up – travel, health & medical costs, sorority fees, cell phones, entertainment.
Some parents prefer prepaid tuition plans where they lock in today’s tuition rates for future use. Others want more flexibility and choose different strategies entirely.
Here’s the contrarian view: you might not have to save 100% of the funds in advance. If you’re a business owner expecting a future sale, or if you have other assets that will grow significantly, paying for college directly might be smarter than tying up money in education-specific accounts.
Your college funding strategy should fit your family, not the other way around.
When Overfunding Becomes a Gift
That client with the $80,000 annual tuition? She thought she’d overfunded her daughter’s 529. But her daughter is likely headed to graduate school too. And the rules keep expanding what you can use 529 funds for.
Plus, there are new provisions that let you roll a modest portion of unused 529 money into a Roth IRA for the beneficiary. The lifetime limit is currently $35,000 per beneficiary, which provides meaningful flexibility for families with leftover funds. The government is making these accounts more flexible because they recognize that families’ needs change.
For those of you with significant wealth, overfunding can even become part of estate planning. Dynasty 529 trusts can fund education for multiple generations. But this only makes sense for families who have more money than they know what to do with.
Building a Plan That Grows With Your Family
You don’t want your college funding strategy set in stone. You want flexibility as your life evolves.
Maybe your teenager decides college isn’t for them. Maybe your business takes off and changes your whole financial picture. Maybe your family situation changes entirely.
The best college funding strategies adapt to these realities instead of forcing you into rigid boxes.
We don’t believe in one-size-fits-all approaches. Every family has different values, different cash flows, and different definitions of success. Our team’s approach is to understand your specific situation and build from there.
The old-school financial planning industry wants to put everyone in the same boxes. We think that’s backwards. Your plan should reflect your priorities, your timeline, and your comfort with uncertainty. And frankly, working through these decisions should feel collaborative and even enjoyable, not like a chore you have to endure.
What This Means for You
If you’re thinking about your own family’s education planning, here’s what we want you to know: you have more options than you realize.
The key is starting with the right questions.
- How do you feel about funding your children’s education?
- Where does this goal fit among your other priorities?
- What flexibility do you need as life changes around you?
- Most importantly, what would give you peace of mind?
Some clients sleep better knowing they have every penny saved in advance. Others prefer to keep their money working in business investments and pay as they go.
Once we understand your answers, we can build a strategy that works for your family’s unique situation. The goal isn’t to check boxes. It’s to create a plan that gives you confidence and flexibility as your family grows and changes.
Getting Started
If you’re new to Team Hewins and want to explore how we approach major financial decisions like college planning, we invite you to learn about our “Big Decision Clarity” meeting. This initial conversation helps you understand exactly how we work with families to navigate life’s biggest financial choices with confidence and peace of mind. Learn more here.
Team Hewins, LLC (“Team Hewins”) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training, and no inference to the contrary should be made. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas. Certain information provided herein is based on third-party sources, which information, although believed to be accurate, has not been independently verified by Team Hewins. Team Hewins assumes no liability for errors and omissions in the information contained herein.