@alextreece asked a great question in the comments of my previous post about what type of account I am using to save for my kid's future.

Initially, I was putting off starting my savings project because I didn't know which type of account to use, and then I realized that the most important thing was to just start. So I initially started with a vanilla brokerage account.

Funny enough, taking that action then motivated me to reach out to a friend who knows a bit more about 529s and now I'm talking with him if we should roll it into a 529.

The benefit of a 529 is that they are not subject to federal income tax if you withdraw to pay for "qualified higher education expenses." This covers a lot of types of education, but nevertheless it still got me pondering what the future of higher education will look like in 20 years.

For context, I just finished a 2-year mastery-based online coding school, which I paid $200 monthly for, (A total of $4,800 for the whole program) and it was a better educational experience than either of my two masters degrees or undergrad. This kind of program does not qualify for 529 funds, since it is not offered through an eligible college or university. (although it's also affordable enough that huge savings wouldn't be necessary for it.)

I have no idea what my future kid will be interested in, but part of me has a sneaky suspicion that educational opportunities will evolve faster than tax policy.

And as things stand now, according to sec.gov, if 529 account withdrawals are not used for qualified higher education expenses, they will be subject to state and federal income taxes and an additional 10% federal tax penalty on earnings. Ouch.

Source: https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html

So, if your kid doesn't end up incurring a "qualified higher education expense", not only will you lose the tax advantages, you will also LOSE 10% of all that money you saved🤦🏼‍♂️.

While it seems unimaginable (and perhaps malicious? haha) for me to bet/hope my kid DOESN'T go to college, my prediction right now is that the American dream will be best achieved by vigorously pursuing non-legacy forms of higher education 20 years from now.

A 529 plan isn't helpful if it incentivizes you to go into debt for a degree that isn't useful. Looking at the bigger picture, the best way to save money would be to start talking to your kid early about what is truly the best way to get the education, experience, network, and opportunities that college ostensibly provides.

I don't want the end result of planning 20 years ahead to be to saddle my kid with 20 years of debt.

So right now I have not rolled the new savings account into a 529. I might down the road for future deposits. But at the end of the day, I'd rather be late in deciding the type of account to use than being late to starting to save.