Your Kid's Education and Your Retirement Belong in the Same Plan

One of the most common things we hear from parents in their 30s and 40s: "I want to help pay for college, but I also need to retire someday — I don't think I can do both." You can. They're not competing goals. They're part of the same financial picture, and building a plan that funds both is exactly what we do.

 

Whether you're a parent just starting to think about education savings, a grandparent looking to contribute meaningfully without triggering tax headaches, or a self-employed professional trying to figure out where college fits alongside an irregular income, Artfx Financial Planning helps you sort through the options and build a strategy that makes sense for your family — not just for the tax code.

529, UTMA, or Savings Account — Here's What Actually Matters

The alphabet soup of education savings vehicles is real, and most families don't have time to become experts in it. Here's a plain-language breakdown of the three most common options and when each one makes sense.

Family under a blue umbrella with a pink heart and leaves in a blue-pink illustration
Black checkmark inside a circle icon on a white background

529 Plans

A 529 is a tax-advantaged savings account designed specifically for education expenses. Contributions grow tax-free, and withdrawals are tax-free when used for qualified education costs — tuition, fees, room and board, books, and in many cases K–12 tuition up to $10,000 per year. Most states also offer a state income tax deduction for contributions, which adds up over time. Utah's my529 plan is consistently ranked among the best in the country for investment options and low fees.

 

The trade-off: if the funds aren't used for education, withdrawals of earnings are subject to income tax plus a 10% penalty. That said, 529s now allow rollovers to a Roth IRA under certain conditions — a relatively recent change that adds meaningful flexibility if your child ends up not needing the full balance.

Black checkmark inside a circle on a white background.

UTMA Accounts

A Uniform Transfers to Minors Act (UTMA) account is a custodial account held in a child's name that transfers to them outright when they reach adulthood (typically 18 or 21, depending on the state). There are no restrictions on how the funds are used, which is the main appeal. The trade-off is that gains are subject to the "kiddie tax," and because the account is counted as a student asset on the FAFSA, it can reduce financial aid eligibility more significantly than a parent-owned 529.

 

UTMA accounts make the most sense when flexibility matters more than tax efficiency — for example, when you're not certain the funds will be used for education, or when the child may pursue a path where traditional college isn't the primary goal.

Black checkmark inside a circle icon on a white background

Regular Savings or Investment Accounts

Sometimes a standard brokerage or savings account is the right answer — particularly for families who want maximum control over the funds, aren't sure about the child's educational path, or are prioritizing other tax-advantaged accounts first. We'll help you evaluate whether the tax benefits of a dedicated education account actually outweigh the flexibility you'd give up.

 

No single vehicle is universally better. The right answer depends on your income, your state's tax treatment, how certain you are about the education path, and how these accounts interact with your broader financial plan. That's the conversation we have together.

How Much Should You Save for College?

This is the question with no clean universal answer — which is why most generic guidance feels unhelpful. College costs vary dramatically by school type, location, and the aid your child is likely to qualify for. A private university in 2040 will cost something very different from an in-state public school, and a child who earns merit scholarships changes the math entirely.

 

What we do instead of giving you a number out of thin air: we model your specific situation. We look at your child's age, your current savings, your income trajectory, the school types you're realistically targeting, and how education savings fits alongside your retirement timeline. Then we build a contribution target that's grounded in your actual life — not a rule-of-thumb from a calculator that doesn't know anything about you.

 

A few anchors that inform most planning conversations:

 

  • The average annual cost of a four-year public university (in-state) is currently around $11,000 in tuition and fees, with total cost of attendance — including room, board, and supplies — closer to $28,000 per year.
  • Private universities average closer to $42,000 in tuition and fees annually, with total costs often exceeding $60,000.
  • At historical average growth rates, costs will be meaningfully higher by the time today's young children enroll.
  • Most families don't fund 100% of college costs from savings — financial aid, scholarships, part-time work, and student loans often cover a portion. Your savings target should account for the realistic gap, not the full sticker price.

 

We help you figure out what that gap is likely to be for your family and how to fund it without derailing everything else.

Saving for Your Grandchildren's Education — Without the Surprises

Grandparents who want to contribute to a grandchild's education often run into the same set of concerns: Will this trigger gift taxes? Will it hurt their financial aid? Am I doing this correctly? These are the right questions to ask, and the answers are more manageable than most people expect.

 

Here's what grandparent-funded education planning typically involves:

 

  • Annual gift exclusion: In 2026, you can give up to $18,000 per recipient per year ($36,000 for a married couple) without filing a gift tax return. Contributions to a 529 count toward this limit.
  • Superfunding a 529: A special election allows you to front-load five years' worth of annual gift exclusions into a 529 in a single year — up to $90,000 per beneficiary ($180,000 for couples) — without gift tax implications, as long as no additional gifts are made to that beneficiary during the five-year period.
  • Financial aid timing: Under the updated FAFSA rules that took effect for the 2024–2025 aid year, grandparent-owned 529 distributions no longer count as student income on the FAFSA. This is a significant change that makes grandparent-funded 529s considerably more favorable from a financial aid standpoint than they were previously.
  • Account ownership: We'll walk through whether it makes more sense for you to own the 529 directly, contribute to a parent-owned account, or use a different vehicle depending on your estate planning goals.

 

Helping your grandchildren get an education is one of the most meaningful things you can do. We make sure the mechanics support the intention.

Family under a blue umbrella with a pink heart and leaves in a blue-pink illustration

Your Retirement Isn't at Risk — If You Plan Both Together

Here's the honest version of the retirement-versus-education tension: if you fund your child's education at the expense of your own retirement savings, you've solved one problem by creating a bigger one. Retirement has no financial aid. No scholarships. No loans designed for it. Your retirement savings are the one thing that genuinely has to come first.

 

That doesn't mean education savings gets deprioritized out of existence. It means we build a plan where both goals have a place — with contribution amounts, account types, and timelines calibrated so that neither one cannibalizes the other. For self-employed clients managing irregular income, that coordination matters even more, because the margin for error is smaller and the sequencing of contributions has to be flexible by design.

 

Kirstin's background as a professional classical singer and Artist in Residence at the University of Utah gives her a perspective that most financial planners don't have: a firsthand understanding of what it costs to pursue a non-traditional educational and career path, and what financial support actually looks like for families navigating those choices. If your child is considering the arts, performance, or any field without a clear salary benchmark at the end of it, that's a conversation worth having with someone who has lived it.

Does a 529 Affect Financial Aid? And Other Questions We Hear Constantly

  • What is a 529 plan?

    A 529 is a tax-advantaged savings account designed for education expenses. Contributions grow tax-free, and withdrawals are tax-free when used for qualified costs like tuition, room and board, and books. Most states offer an additional state income tax deduction for contributions. The funds can be used at colleges, universities, vocational schools, and in some cases for K–12 tuition.

  • Does a 529 affect financial aid eligibility?

    A parent-owned 529 is counted as a parental asset on the FAFSA, which typically reduces aid eligibility by a maximum of 5.64% of the account value — a relatively modest impact. As of the 2024–2025 aid year, grandparent-owned 529 distributions no longer count as student income on the FAFSA, which removed a significant disadvantage those accounts previously carried. The financial aid interaction is one of the factors we weigh when recommending which account type and ownership structure makes sense for your family.

  • Is a UTMA better than a 529?

    It depends on what you're optimizing for. A 529 offers better tax advantages and is treated more favorably for financial aid purposes. A UTMA offers more flexibility — the funds can be used for anything, not just education. The downside is that UTMA accounts are counted as student assets on the FAFSA, which can reduce aid eligibility more significantly than a parent-owned 529. For families who are confident the funds will go toward education, a 529 is usually the stronger choice. For families with more uncertainty about the path, a UTMA may be worth considering alongside a 529.

  • How do I open a 529 for my grandchild?

    You can open a 529 directly through a state plan — you don't have to use your own state's plan, though doing so may offer state tax benefits. You'll name a beneficiary (your grandchild), choose an investment allocation, and make contributions. The account can be owned by you or transferred to the child's parents depending on your goals. We help grandparents think through ownership structure, contribution strategy, and how the account fits into their broader estate planning picture before they open anything.

  • How much should I save for college?

    There's no universal answer, and anyone who gives you one without knowing your situation is guessing. The right target depends on your child's age, the type of school you're planning for, the financial aid your family is likely to qualify for, and how education savings fits alongside your other goals. We model this specifically for your family rather than applying a rule of thumb — and we build a contribution strategy that's realistic given your income, timeline, and priorities. Can I use a 529 if my child doesn't go to college? Yes, with some flexibility. 529 funds can be used for vocational and trade school programs, apprenticeships, and K–12 tuition. If the beneficiary doesn't use the funds, you can change the beneficiary to another family member without penalty. You can also roll over up to $35,000 of unused 529 funds into a Roth IRA for the beneficiary (subject to annual contribution limits and a 15-year account seasoning requirement). If funds are withdrawn for non-qualified expenses, the earnings portion is subject to income tax plus a 10% penalty — which is why we plan the contribution amount carefully from the start.