What Families Should Do With Leftover 529 Plan Money

529 plans were originally created to help families save for higher education with the benefit of tax-free growth. Over the years that definition has expanded, but it still calls into question: what happens when you're done with education and have an unused balance?

Reasons range from children receiving scholarships, choosing lower-cost schools, finishing degrees early, or even deciding not to attend college at all.

While funds in a 529 plan don’t expire, spending them on non-education costs generally triggers taxes and a 10% penalty on the earnings portion. Some states may levy a penalty as well!

The good news is that families now have more ways than ever to use extra funds without losing the tax advantages.