Saving too much for education may not sound like a problem, but it happens more often than many families expect. A child may receive scholarships, choose a less expensive school, attend a trade or vocational program, enroll in a U.S. military academy, or decide not to pursue a traditional college path at all.

The good news is that leftover 529 assets do not necessarily mean you over planned. In many cases, they simply mean your family has more flexibility than expected. If your beneficiary finishes school with money still in a 529 account, there may be several ways to use those assets strategically.

Here are five options to consider with your Financial Advisor.

1. Change the beneficiary

If one child no longer needs the full balance in a 529 plan, changing the beneficiary to another qualifying family member is often one of the most straightforward options.

Depending on the plan rules, eligible family members may include the beneficiary’s sibling, parents, spouse, child, stepchild, foster child, adopted child, aunt, uncle, niece, nephew, in-laws, cousin, or certain descendants of those individuals.

This can be useful if:

• another child or grandchild may need education funding
• a family member plans to attend graduate school or a professional program
• someone in the family may pursue continuing education in the future

In many cases, changing the beneficiary to a qualifying family member generally does not trigger taxes or penalties. However, transfers involving certain family relationships or generational changes can carry gift or generation-skipping transfer tax considerations, so it is important to consult an independent tax advisor based on your circumstances.

2. Keep the funds for future education

An unused 529 balance does not have to be spent immediately. If the beneficiary may pursue additional education later, keeping the account in place may preserve flexibility.

For example, remaining assets may potentially be used for:

• graduate school
• professional programs
• certain trade or vocational schools
• qualifying apprenticeship-related education expenses

This option may be especially helpful for families whose child is still early in their career or has not yet decided whether additional education is part of the plan.

3. Use the funds for student loan repayment

A 529 plan may also help with student loan repayment, subject to applicable limits.

Principal and interest payments toward qualified education loans can be treated as qualified expenses, but there is a lifetime limit of:

• $10,000 per beneficiary
• $10,000 per sibling of the beneficiary

For example, a family with two children may be able to use up to $20,000 in total toward student loans, assuming all requirements are met.

While this may not eliminate a large loan balance, it can still be a useful way to reduce debt and put leftover education savings to work.

4. Evaluate a Roth IRA rollover, if eligible

For some families, one of the most compelling newer planning opportunities is the ability to roll over certain 529 assets to a Roth IRA for the beneficiary.

This option can be attractive because it may allow leftover education savings to support long-term retirement planning instead.

However, several conditions apply. Among them:

• the Roth IRA must be in the name of the 529 beneficiary
• the 529 account must generally have been maintained for at least 15 years
• rollovers are subject to annual Roth IRA contribution limits
• there is a lifetime rollover limit of $35,000
• 529 contributions and earnings from the last five years may not be eligible for rollover

Because the rules are specific, this strategy should be reviewed carefully before moving forward. Still, for families who qualify, it may turn unused college savings into a meaningful head start on retirement savings.

5. Consider specialized or legacy planning opportunities

In some cases, leftover 529 funds may support broader family or estate planning goals.

Transfer funds to an ABLE account

If the beneficiary has special needs, it may be possible to transfer limited amounts from a 529 plan to an ABLE account, subject to annual contribution limits and eligibility requirements. ABLE accounts can be used for qualified disability expenses, including education, housing, healthcare, job training, and other support needs.

Preserve the account for a future generation

Because there is generally no deadline to use 529 assets, some families choose to keep the account in place and eventually use the funds for a grandchild’s education. This can be a meaningful way to create an educational legacy while maintaining control of the account.

Incorporate the account into estate planning

529 plans can also play a role in estate planning because they may help reduce a taxable estate while still allowing the account owner to retain control over the assets. For families with larger estates or multigenerational planning goals, that flexibility may be worth revisiting.

When a non-qualified withdrawal may still make sense

If none of the other options fit your family’s situation, a non-qualified withdrawal may still be appropriate.

In that case:

• contributions can generally be withdrawn free of tax and penalty
• earnings may be subject to income tax
• earnings may also be subject to a 10% penalty

There are also situations in which the 10% penalty may be waived, such as when the beneficiary receives a scholarship, attends a U.S. military academy, becomes disabled, or passes away. Even then, income tax may still apply to the earnings portion of the withdrawal.

Although this is often the least tax-efficient route, it may still be reasonable in certain cases—especially if the taxable portion is limited and other planning priorities take precedence.

Flexibility can be part of the plan

A leftover 529 balance does not necessarily mean your savings strategy missed the mark. In many cases, it reflects the reality that education plans evolve.

Whether the right next step is changing the beneficiary, preserving the account for future education, using a portion for student loan repayment, evaluating a Roth IRA rollover, or incorporating the balance into a broader estate planning strategy, the key is understanding the options before taking action.

College Savings Month is a good reminder that planning is not only about preparing for the expected. It is also about staying flexible when life takes a different path.

Your Financial Advisor can help you review your 529 account and determine which strategy may best align with your family’s education, tax, and long-term planning goals.