Hello,
I, 27F, have a specific question that I haven’t really seen talked about much before.
I have a lot of money in my 529 account left over. Like more than enough for me to get another degree even after I convert the 35k max into a roth. My parents budgeted for twice the amount than I actually needed, and it’s kept growing since I graduated in 2021. I’m not having kids and would like to keep it for myself.
I have a stable job as a technician at a research company. It’s fine, but I’m going on 4 years and starting to feel stuck. There are also very few new research positions opening bc of cuts, so even though I want to try a new position, I haven’t been able to find one.
My main question:
I just started thinking about using my 529 money to go get a degree for “fun” somewhere and use it as a way to retire gradually. My bachelors is in Environmental Science, but I’m thinking about doing an MFA, a language program or something science-y that i’m interested in like horticulture. I feel like it would be a way to take a break from the rat race, have some personal growth, and maybe even discover a career path I’m actually enthusiastic about along the way. And I’d have enough left over to let it grow and do it again down the line even.
I’m also very fortunate to have received inheritance from my grandfather when I was young. It has been invested wisely and I’m pretty frugal, so I’m basically working for health insurance and to eventually reach my FIRE number. So Im not incredibly worried about stunting my career growth as I think I could get another entry level position at a biotech company again and be just fine.
My current plan is: If I’m still stuck at this job by this time next year, I’ll apply to programs during next year’s application period and start the program Fall 2027. This gives me a whole year to research places I’d want to go.
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Does this seem like a good idea/are there any downsides I haven’t thought about
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Anyone have any experience doing this or going back to school later in life? Any “fun” degrees you’d recommend looking into?
Using 529 Account Money as a Way to Gradually Retire
byu/Tired-Time inpersonalfinance
Posted by Tired-Time
10 Comments
That’s actually a pretty smart way to use leftover 529 money instead of just paying the penalty. Going back for something you’re genuinely interested in could definitely help you figure out what direction you want to take career-wise, plus you get a mental break from feeling stuck
Just make sure whatever program you pick has decent networking opportunities even if it’s “for fun” – you never know where those connections might lead
If I could do this I would in a heartbeat.
I mean how far do you want to stretch this? Let it grow to 50 and then re-enroll in college? Use it to find all your base living expenses, as long as you live like a college student. College dorms can be really nice these days.
You can also pull out $10k by getting a student loan, using it, and then repaying the loan from the 529.
It actually sounds really fun. Retire early by going to college for the rest of your life. Getting multiple degrees.
It realy just sounds like your want to use your 529 for leisure but under the label of education?
If thats the case, then the decision making is realy just alike any other leisure-focused spending.
If you really think your life and career will continue to be on the appropriate path towards a happy and fulfilled future, then go right ahead.
Why don’t you roll it over to a Roth? The money has to have been in the 529 for 15 years, and there are limits on how much you can roll. But you could, over a series of years, rollout the entire amount into a Roth IRA.
I’ve thought about something like this too. If you had enough money in a 529 account (and California lets you contribute until you hit $529,000), you could theoretically just go to school full time (6 units per semester is really not that much) and use the tax-free money to pay for food, rent, and many other items.
What are your interests? PhD programs are often fully funded, but you can take out student loans for living expenses that you could repay from your 529. What would be fun depends on your interests. American studies or art history? Psychology? PhD psychologists are well paid and lots of interesting and important work you can do.
Do a semester at sea or a university with a study abroad program.
Friend is getting a grad degree in wine in France and galavanting around Europe. Or if you like fine arts, could do the same in Europe. Sounds like an amazing use of 529 funds for leisure!
529s can be used for room and board expenses penalty free. Get creative with moving somewhere, taking courses (even community college), and using the money for housing. It doesn’t have to be on campus.