The Planning Corner: Considerations When Funding a 529 Plan

Aug 25 2026 | Back to Blog List

VIDEO TRANSCRIPT:

David Ernst: I'm David Ernst, partner at Cedar Point Capital Partners, here with our director of financial planning, Nick Timm. With school starting back up, we're talking about how and how much to fund a 529 Plan.

Nick, does it matter as much if someone's son or daughter doesn't take the traditional four-year path through college?

Nick Timm: I would say less than it used to. You can transfer any unused funds to another child or to the beneficiary's Roth IRA up to a limit, so that does take some of that what-if risk off the table.

David: So how much should someone contribute?

Nick: Well, in 2026, the state of Iowa will allow you to deduct contributions of up to $6,100 per beneficiary, which ends up being $12,200 if you and your spouse have an account, so maybe use that as a target. Otherwise, fund it just like any other goal—but I wouldn't put it in front of your own retirement.

David: Iowa's IA 529 Plan recently introduced enrollment-based portfolios. Does someone have to actively manage those or do they pretty much take care of themselves?

Nick: Those are pretty much hands-off. You select the enrollment date you plan to use the funds. They're more aggressive the farther out you are, and more conservative the closer you are to needing them. Other plans will use age-based options which work very similarly.

David: If you're weighing whether to fund a 529 Plan or not, aim for balance and not an all-or-nothing bet. If you'd like help fitting education savings into your broader financial plan, you can learn more and connect with us at cedarpointcap.com.

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