You Don't Need to Be Ready for Kids to Be Ready for a 529 | Chase McCormick

By: Chase McCormick

I'll be honest with you: a 529 is probably not the first investment account you should open. When you're building the pillars of your financial plan, a few things generally come first.

On the surface, a 529 is a tax-advantaged way to save for a child's education. And that tax advantage is the whole reason to care: the money grows tax-free, and it comes out tax-free when it's spent on education. Similar to your Roth, a 529 has no annual tax drag or capital gains bill at withdrawal, just growth that compounds untouched by Uncle Sam. For parents saving for college, most financial professionals consider that a no-brainer.

But for a childless twenty-something who just finished school themselves, it can feel unnecessary. Here's what changes that: a modern 529 isn't only for your future kids. It can work for you, and any money left over doesn't have to stay locked into education spending at all. For young investors who take their finances seriously and want to build beyond the foundation they already have, it becomes a flexible, tax-efficient way to take your plan to the next level. And the best part: there are a lot of different ways to eventually put the money to use.

A slow but impactful build

For parents, a 529 is one of the best accounts you can have. I'd consider it an essential piece of a plan for anyone helping a child pay for college.

But if a 529 feels premature for you, that instinct may not be entirely accurate. This article isn't necessarily a push for young investors to make it a top priority. It's a nudge for those who are already contributing up to their employer's 401(k) match, maxing out a Roth IRA, and growing a brokerage account toward their non-retirement goals, to understand why a 529 is a great place to put some extra cash. 

A few reasons it's still worth starting small now:

College keeps getting more expensive. Factor in inflation and the numbers only get scarier, which is exactly why the 529 has become such a core part of parents' financial plans. Starting early lets small contributions compound over time, so you're not scrambling to write big checks in a short window later. This is the time value of money working in your favor: a dollar you invest today has years, even decades, to grow before anyone touches it, which makes it worth far more than a dollar you add right before tuition is due. The earlier you start, the more of the final balance comes from growth rather than from your own paycheck. Time does the heavy lifting, as long as you give it time.

You're probably closer to funding a kid's education than your own retirement. When you frame it that way, you have more incentive than you'd assume. Plenty of parents end up dipping into retirement savings, or taking on debt, to cover tuition they didn't plan for. A little foresight now can save you from jeopardizing your goals later.

The ultimate green flag for a future spouse. It’s true, few things say "stable, forward-thinking partner" quite like mentioning you've already opened a 529 for kids who don't exist yet. Call it the ultimate green flag: emotional maturity that compounds and impresses the person you're hoping to start a family with.

The benefits people don’t realize 

The most common hesitation is that "college savings" sounds like a one-way door, and nobody wants to trap money they might need for something else. But the 529 keeps evolving to match how people actually learn today: it now reaches trade schools, apprenticeships, professional certifications, and even student loan repayment. A credential counts, not just a diploma.

And here's where that flexibility gets even more beneficial:

• You can name yourself as the beneficiary (grad school, a certification, or a career pivot), then change it later to a future child, a sibling, or someone else in the family.

• Unused funds can move into a Roth IRA (within the rules), so money you don't spend on education can go toward retirement instead. That means if your child does get a scholarship, you can reward them with a pre-funded retirement account that has 40+ years to keep compounding.

That single feature quietly answers the "but what if my plans change?" worry. A modern 529 isn't a bet that your life unfolds exactly one way. It's a tax-advantaged container that adapts as your plans do.

The bottom line

A 529 isn't the account to start with, and anyone who tells you otherwise is probably skipping steps. But once your core financial boxes are checked, it's one of the most flexible, tax-efficient ways to build toward education, yours or someone else's, without limiting yourself.

If you want to figure out where you actually stand on that list, and whether a 529 is the right next step for you, let's map it out together.

Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California. Gerber Kawasaki Wealth & Investment Management is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Gerber Kawasaki Wealth & Investment Management 's current written disclosure brochure filed with the SEC which discusses, among other things, Gerber Kawasaki Wealth & Investment Management's business practices, services and fees, is available through the SEC's website at: http://www.adviserinfo.sec.gov .

Chase McCormick is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.78B billion in assets under management and assets under advisement as of 06/30/26. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."