Wen 529 Plans?

My oldest child turned 16 a couple of weeks ago. When my wife and I discovered we were expecting I knew I wanted to set this sweet child of mine up for success in the future. A recent college grad at the time, my parents did everything to ensure I had no student loans upon graduation; a gift that I felt an obligation to pass on to this embryo.

So I literally put away $100/month in preparation of having $900-$1000 to open a 529 Plan upon receipt of birth certificate. I’ve since contributed $100/month to this day; doing my 529 Plan through Vanguard using low cost index funds. Over the life of my child, I’ve contributed over $20,200 towards her college. Today those contributions are worth $39,800.

Lightning crashes. Fast forward to today where I’m a recently crowned Uncle. I’m asked by my sister-in-law about college savings options for my niece. This is no longer a no brainer decision. You see unlike 16 years ago, I now know about 19.4% fixed interest rates via the Anchor protocol and $UST. I realize that $900 with $100/monthly contributions would now be worth over $114,000.

But, you don’t get the tax benefits of a 529 Plan through Anchor. After all, I can take those 529 plan investment gains out tax free as long as I’m using them for appropriate college expenses. So take that crypto.

Wait a second. Did you know though that for 2021, individuals can contribute up to $15,000 a year without using up part of their lifetime gift tax exemption or having to pay gift taxes and married couples can contribute up to $30,000 a year.

So now my sister-in-law and her husband can make massive gains via Anchor and move any necessary funds over for college in the amount of $30k a year as my niece becomes close to graduating. Even better though, if she decides to not pursue school that money could help her in other ways and not be tied up strictly for college expenses.

What if I didn’t have to explain to my sister-in-law how to purchase $UST and move into Anchor? What if this option was just provided to normies who could deposit fiat at an investment schedule of their choosing and get 19.4% fixed interest while the crypto stuff was all behind the scenes? I suspect crypto 529 Plans will be coming very soon and I’m very much looking forward to seeing their implementation. Until that time, I’ll keep asking, “Wen 529 Plans?”.

Note: This is not financial advice nor am I a financial advisor. Do your own research.