Financial Planning Is a Long Conversation, Not a One Time Transaction

Some of the biggest financial decisions in life take years to prepare for.

Buying a home, paying for college, preparing for retirement, helping aging parents, investing in a child’s business, transferring wealth to grandchildren, and planning the future of a family business are not isolated decisions. Each one can affect the others.

That is why I believe every family should have a trusted financial advisor who understands the full picture and is willing to ask difficult questions.

A good advisor does more than recommend investments. This person helps you and your spouse define your goals, test your assumptions, understand tradeoffs, and make decisions before a deadline or crisis takes the choice away from you.

Choose an advisor for capability, not age

Experience matters, especially when a family is balancing young children, aging parents, business ownership, retirement, and estate planning. But age alone does not determine whether an advisor is qualified.

A better question is whether the advisor has the credentials, planning tools, professional support, and relevant experience to address your family’s situation. A younger advisor at a strong firm may have access to experienced specialists and sophisticated planning software. An older advisor may have decades of perspective but still lack the process or expertise your situation requires.

Ask prospective advisors:

• How do you build and update a written financial plan?

• How are you compensated, and where could conflicts of interest arise?

• Are you acting as a fiduciary when advising me?

• What experience do you have with business owners, the sandwich generation, college planning, and retirement income?

• Which tax, legal, insurance, and investment professionals will be involved?

• How often will you meet with both spouses?

• What happens to our relationship if you retire or leave the firm?

The goal is not to find someone who agrees with every decision. It is to find someone you trust enough to challenge you when the numbers, timing, or risk do not support the plan.

Bring both spouses into the conversation

Routine meetings with both spouses are one of the most effective planning habits a family can develop.

One spouse may focus on retirement. The other may be worried about college costs, caring for a parent, or helping a child buy a home. If only one person attends the meetings, important concerns can remain hidden and one spouse may be left unprepared if something happens to the other.

A coordinated plan gives both people a voice and creates a regular place to discuss questions such as:

• When can we retire without putting future income at risk?

• How much can we contribute toward college without sacrificing retirement?

• Can we help a child start a business or buy a home?

• How should we support aging parents?

• What would happen to our family or business if one of us died or became disabled?

These decisions benefit from time. Waiting until a tuition bill, home purchase, health event, or retirement date is close can sharply reduce your options.

Life and disability insurance belong in the plan

People often have their guard up when discussing life insurance or disability insurance, and that is understandable. Insurance professionals may be paid a commission, so clients deserve to know how recommendations were developed.

I have delivered several life insurance death benefit checks during my career. I have never had a family tell me the benefit was too large and ask me to take part of it back. At the same time, “you can never have enough” is not a sound purchasing formula. The right amount should be tied to real obligations, resources, goals, and affordability.

A financial advisor can bring an independent perspective to that calculation. Planning software can estimate income replacement, debt repayment, education funding, final expenses, business obligations, and the effect of existing savings. Disability coverage should receive the same attention because a long period without earned income can derail nearly every other goal in the plan.

The objective is not to buy the largest policy. It is to identify the financial gap and choose an appropriate way to address it.

Why a 529 plan deserves an early start

For many families, education is one of the largest long term expenses they will fund. Wisconsin’s direct sold 529 college savings plan is Edvest 529, although families are not limited to using Wisconsin schools.

A 529 plan is funded with money that has already been taxed for federal purposes. The investments can grow without current federal income tax, and withdrawals are generally free from federal income tax when used for qualified education expenses. Wisconsin taxpayers may also qualify for a state income tax deduction for contributions to a Wisconsin 529 plan. For the 2026 tax year, Edvest states that the deduction is up to $5,280 per beneficiary for a single filer or married couple filing jointly, and up to $2,640 per beneficiary for married couples filing separately.

Starting when a child is born or very young can provide more years for contributions and potential compounding. It also gives the account time to satisfy the 15 year requirement that applies to a possible 529 to Roth IRA rollover later.

Investment returns are not guaranteed, and a 529 account can lose value. Still, time generally provides more planning flexibility than trying to catch up when a child is already in high school.

What can a 529 plan pay for?

Qualified uses can include much more than tuition at a four year college.

College, university, trade school, and graduate education

Qualified higher education expenses may include:

• Tuition and required fees

• Books and supplies

• Computers, required software, printers, and internet access used by the beneficiary during enrollment

• Certain equipment needed for enrollment or attendance

• Room and board within federal limits when the student is enrolled at least half time

• Certain expenses for a student with special needs

Eligible schools can include accredited public and private colleges, universities, community colleges, trade schools, and many graduate or professional programs, including law school, medical school, MBA programs, and doctoral programs.

Registered apprenticeships and credentials

A 529 can cover certain fees, books, supplies, and equipment required for participation in an apprenticeship registered and certified with the U.S. Department of Labor. Federal law also expanded qualified uses for certain recognized postsecondary credentialing programs.

Student loan repayment

Up to $10,000 over a beneficiary’s lifetime may be used for principal or interest on qualified education loans. An additional lifetime limit of up to $10,000 applies for each sibling whose qualified loan is repaid. Student loan interest paid with tax free 529 money cannot also be used for the student loan interest deduction.

Kindergarten through grade 12 expenses

This rule changed recently. Beginning in 2026, federal law increased the limit from $10,000 to $20,000 per beneficiary each year and expanded the list beyond tuition. Qualified expenses can include tuition, curriculum and instructional materials, certain tutoring, standardized tests, Advanced Placement exams, college admission exams, dual enrollment fees, and certain educational therapies for students with disabilities.

State treatment can differ. Families who pay taxes outside Wisconsin should confirm their state’s rules before taking a withdrawal.

What if the child does not use all the money?

Unused money does not automatically become trapped. Depending on the circumstances, the account owner may be able to:

1. Change the beneficiary. The account can generally be moved to another qualifying family member, such as a sibling, child, grandchild, spouse, parent, or certain other relatives, without federal income tax consequences when the rules are followed.

1. Leave it invested. A 529 plan generally has no federal age deadline requiring the money to be spent. It may remain available for graduate school, a later career change, or a future family member.

1. Use the scholarship exception. If the beneficiary receives a tax free scholarship, an amount up to the scholarship may generally be withdrawn without the additional 10 percent federal tax. The earnings portion is still generally subject to income tax.

1. Make a nonqualified withdrawal. Contributions are returned without federal income tax because they were made with after tax dollars. The earnings portion is generally subject to ordinary income tax and an additional 10 percent federal tax unless an exception applies. Exceptions to the additional tax can include a scholarship, attendance at a U.S. military academy, death, or disability. State tax and deduction recapture rules may also apply.

1. Consider an eligible rollover to the beneficiary’s Roth IRA. This can be valuable, but the rules are narrow.

The 529 to Roth IRA rollover rules

Beginning in 2024, federal law created a path for certain unused 529 assets to move to a Roth IRA for the same beneficiary without federal income tax or the usual additional tax.

The main requirements include:

• The 529 account must have been open for at least 15 years.

• The transfer must go directly from the 529 plan to a Roth IRA maintained for that same beneficiary.

• Contributions made during the preceding five years, and earnings attributable to those contributions, are not eligible.

• The lifetime limit is $35,000 for each beneficiary across 529 plans.

• The amount moved in one year is limited by that year’s IRA contribution limit, reduced by other IRA contributions made for the beneficiary that year. The general IRA limit for someone under age 50 is $7,500 in 2026.

• Plan providers commonly require the beneficiary to have compensation at least equal to the amount transferred. Current provider guidance also notes that some IRS interpretation questions remain.

Edvest states that the normal Roth IRA income limits are waived for an otherwise qualified 529 rollover. Because federal guidance continues to develop, families should confirm the current rules with Edvest, the Roth IRA custodian, and a tax advisor before transferring money. Beneficiary changes may also create questions about the 15 year clock.

The rollover is not a reason to intentionally overfund a 529 plan. It is a limited backup option for eligible money that remains after education needs are known.

Can a 529 plan help a child buy a first home?

Not directly.

A down payment is not a qualified 529 expense. Taking money straight from a 529 plan for a home purchase would generally make the earnings portion taxable and potentially subject to the additional 10 percent federal tax.

A 529 to Roth IRA rollover may create an indirect, long term planning path, but families should not describe the entire rollover as an immediately available, tax free down payment.

Roth IRA withdrawal rules are separate from 529 rules. Regular Roth IRA contributions are generally distributed before earnings and can usually be withdrawn without income tax or penalty. For earnings, a qualified first home distribution can be tax free only if the Roth IRA’s five tax year requirement has been met, and the lifetime first home limit is $10,000. If the five year requirement has not been met, the first home exception may remove the additional 10 percent tax on eligible earnings, but the earnings can still be taxable.

For this purpose, a first time homebuyer generally means someone who had no ownership interest in a principal residence during the two year period ending on the purchase date. If married, the spouse must also meet that test. Qualified acquisition costs generally must be used within 120 days of the Roth IRA distribution.

There is another important uncertainty. A 529 rollover can contain both original contributions and earnings, and the IRS has not fully clarified every question about how those amounts interact with Roth IRA distribution ordering. The safe message is this: start early to preserve options, but do not promise that $35,000 of 529 money will become an immediate tax free home down payment. Have a tax advisor review the Roth IRA’s history and the source of the funds before any withdrawal.

Where Trump Accounts fit

Trump Accounts are a new savings option for children, but they do not replace a 529 plan.

Beginning July 4, 2026, an authorized adult can establish a Trump Account for a child who is under age 18 at the end of the election year and has a valid Social Security number. The account belongs to the child, and the beneficiary cannot be changed.

A separate federal pilot program provides a one time $1,000 Treasury contribution for an eligible child who was born from January 1, 2025, through December 31, 2028, is a U.S. citizen, and has a valid Social Security number. This distinction matters. Trump Accounts are not limited only to children born during those four years. The $1,000 pilot contribution is.

Key rules include:

• Personal and employer contributions are generally subject to a combined $5,000 annual limit for 2026 and 2027. The federal pilot contribution and certain other contributions do not count against that limit.

• An employer program may provide up to $2,500 per employee each year on a tax favored basis, subject to the overall rules.

• Personal contributions are generally made with after tax dollars and are not deductible.

• During the growth period, investments are generally limited to qualifying low cost funds that track primarily U.S. equities, without leverage, and with annual fees and expenses no higher than 0.10 percent.

• Distributions are generally prohibited during the growth period, which ends before the year the child turns 18, except for limited situations specified by law.

• Starting in the year the child turns 18, the account generally follows traditional IRA rules. The taxable portion of a withdrawal is generally treated as ordinary income, and an additional 10 percent federal tax may apply unless an exception is available.

After the growth period, traditional IRA exceptions can include up to $10,000 for a qualified first home purchase and qualifying higher education expenses. These exceptions generally remove the additional 10 percent tax. They do not automatically make the distribution income tax free.

A later conversion from a Trump Account to a Roth IRA may be possible under the rules that apply to traditional IRA conversions, but a conversion can create taxable income. It is not an automatic tax free rollover. The timing, the beneficiary’s tax bracket, and future IRS guidance all matter.

For a family whose primary goal is education, a 529 plan will often be more efficient because qualified education withdrawals can be income tax free. A Trump Account may complement a 529 by creating a separate, flexible asset for the child’s long term future.

Families can make an election using IRS Form 4547 or the federal online process. Before contributing, review the current information at IRS.gov and TrumpAccounts.gov because implementation guidance continues to develop.

Start early, then review the plan regularly

The best financial plans are not built around one product. A 529 plan, Roth IRA, Trump Account, life insurance policy, disability policy, retirement account, and business plan each solve different problems.

The real value comes from coordinating them.

Starting an Edvest 529 account when a child is young can create years of potential growth and preserve future flexibility. It does not guarantee college will be fully funded, that unused money will reach a Roth IRA, or that the Roth IRA will provide a tax free down payment. Those outcomes depend on contribution levels, investment performance, account age, earned income, future law, and the family’s decisions.

A trusted financial advisor can help you model those possibilities, coordinate with your tax and legal professionals, and revisit the plan as your family changes. The most useful advisor is not simply the person who gives you an answer. It is the person who keeps asking the questions that help you make a better decision.

If you are reviewing college funding alongside life insurance or disability insurance, MM Insurance Associates can help you identify the protection questions that belong in the broader plan. Call us at (262) 754-4736 to start the conversation with an insurance professional, then coordinate the final strategy with your financial and tax advisors.

Frequently Asked Questions

Can I use a 529 plan for a home down payment?

No. A home purchase is not a qualified 529 expense. A possible indirect strategy involves an eligible rollover to the beneficiary’s Roth IRA followed by a later Roth IRA withdrawal under separate rules. This requires years of planning and professional tax guidance.

How long must a 529 account be open before money can move to a Roth IRA?

The account must have been open for at least 15 years. Contributions made during the preceding five years, and earnings associated with them, are not eligible for the special rollover.

How much can move from a 529 plan to a Roth IRA?

The lifetime limit is $35,000 per beneficiary. Annual transfers are also limited by the applicable IRA contribution limit, reduced by the beneficiary’s other IRA contributions for that year.

Can a 529 plan pay for private school before college?

Yes, within the rules. Beginning in 2026, up to $20,000 per beneficiary per year can be used federally for a broader list of qualified kindergarten through grade 12 expenses. State tax treatment may vary.

Are Trump Accounts only for children born from 2025 through 2028?

No. An eligible child under age 18 with a valid Social Security number can have an account established. The one time $1,000 federal pilot contribution has the narrower birth date and citizenship requirements.

Is a first home withdrawal from a Trump Account tax free?

Not necessarily. After the growth period, the traditional IRA first home exception may avoid the additional 10 percent federal tax on up to $10,000, but the distribution is generally still subject to ordinary income tax.

Sources and important notice

Rules and limits were checked against IRS Topic 313, IRS Publications 590 A, 590 B, and 970, IRS Notice 2025 68, IRS Form 4547 instructions, and current Edvest 529 materials.

This article provides general educational information, not investment, tax, or legal advice. Tax laws, limits, state treatment, and federal guidance can change. Consult a qualified financial advisor, tax professional, and attorney about your circumstances before opening, funding, rolling over, converting, or withdrawing from an account.