Saving on Taxes with a 529 Plan

November 10, 2020 bogleheads [investing]

Every now and then a post like Any 529 Abusers Here? appears on the Bogleheads about using a 529 account as a tax-shelter for non-education purposes.

Like most posts, people post a bunch of speculation but no one does the math. Most, I suspect, don’t even think before posting.

A simple thought experiment should suffice.

Of course this all assumes no changes in current tax law. It is always possible the penalty on 529s may change or capital gains tax increased to stick it to the fat cats.