Two More Accounts Worth Knowing

Most people stop at retirement accounts. But two specialized accounts solve very specific problems beautifully — college costs and charitable giving.

529 Plans — The College Account

A 529 is a state-sponsored investment account for education expenses. It works a lot like a Roth IRA, but for school:

• Contributions — not federally deductible, but many states offer their own income tax deduction or credit;
• Growth — tax-free;
• Withdrawals — tax-free if used for qualified education expenses (tuition, books, room and board, K-12 tuition up to $10k/year, even apprenticeships).

There's no federal contribution limit, but contributions count as gifts. In 2026, you can give $19,000 per recipient per year without filing a gift tax form. There's also a "superfunding" trick: you can front-load five years of gifts at once — up to $95,000 per donor, per beneficiary — and treat it as spread across five years for gift tax purposes.

What If The Kid Doesn't Go To College?

This used to be the big 529 fear. Not anymore.

Under SECURE 2.0, unused 529 funds can be rolled into a Roth IRA for the beneficiary (up to $35,000 lifetime, subject to conditions). So even if your kid skips college, the money turns into their retirement seed.

You can also:

• Change the beneficiary to another family member (another kid, niece, nephew, even yourself);
• Pull out the money and pay tax + 10% penalty only on the earnings, not on the contributions you made.

Donor-Advised Funds (DAFs) — Charity On Your Timeline

A DAF is a charitable account at a sponsor like Fidelity Charitable, Schwab Charitable, or Vanguard Charitable. Here's the move:

• You contribute cash or appreciated stock to the DAF;
• You get the full charitable deduction the year you contribute;
• The money stays in the DAF, invested, growing tax-free;
• You distribute grants to actual charities — this year, next year, or decades from now.

The big advantage: bunching.

Say you normally donate $5,000/year to charity. Your standard deduction beats your itemized total, so the donation gives you no tax benefit. Instead, you put five years' worth ($25,000) into a DAF in one year — itemize that year, get the full deduction — and then grant the $5k/year to your usual charities over the next five years. Same total giving. Big tax win.

Donating appreciated stock to a DAF is even better: you skip the capital gains tax entirely and get the deduction on the full market value.