The so-called “big, beautiful” budget bill made headlines for, among other things, introducing a new type of investing account that parents could open on behalf of children under 18.
For U.S. citizens born from 2025 through 2028, the government will seed the portfolios, which have come to be known as Trump accounts, with an initial contribution of $1,000.
It’s easy to see why the accounts took the spotlight — free money is free money. But if you’re a parent looking to save money for your child’s education in particular, the bill also quietly made an investment vehicle designed for that purpose more flexible.
When it comes to saving for a child’s education, “a 529 account is the only account that is both tax-deferred and tax-exempt,” as long as you put the money toward a qualified educational expense, says Tai Kim, a wealth strategist at Truist Wealth. “And that definition has been ever-growing.”
Under the new bill, accounts that were originally designed to let families save for higher education costs now support an even larger swath of education and career-related costs.
