Does Your Kid's 529 Count in Your Net Worth?

Yes, a 529 counts in your net worth. It's your account, not your kid's.

This surprises people every time. A 529 education savings plan is legally owned by the person who opened it, typically a parent or grandparent, not by the child who benefits from it. The account owner controls the investments, decides when withdrawals happen, and can even change the beneficiary to a different child, a grandchild, or themselves. Because you own it, it belongs on your side of the balance sheet when you calculate your net worth, the same as a brokerage account or an IRA.

The instinct to leave it out is understandable. The money is earmarked for a specific kid's education, it feels wrong to think of it as "yours," and you have no intention of ever spending it on yourself. None of that changes the legal ownership. Two Bogleheads forum threads asking this exact question, "Should 529s be counted part of our net worth?" and "Include 529 in net worth?", land on the same answer from experienced posters: it's an asset you control, so it counts, even if you mentally set it aside as spoken for.

Why the "it's not really mine" feeling is wrong, and why it matters anyway

Compare a 529 to a 401(k). Nobody hesitates to count a 401(k) in net worth even though it's earmarked for retirement decades away and comes with restrictions on when you can touch it. A 529 works the same way structurally: it's an asset with restrictions on the tax-free use of its growth, not an asset you've already given away.

The legal test for whether something counts as your asset is control, not intent. You can:

• Change the beneficiary to another qualifying family member, including yourself, at any time
• Withdraw the money for non-education expenses (you'll owe income tax on the earnings portion plus a 10% penalty, but the money is accessible)
• Close the account entirely

None of that is true of money you've actually given away, like a completed gift to a grandchild's UTMA account, which the child legally owns once transferred. A 529 you opened and control is a different category of asset entirely, even if you never plan to exercise that control.

The feeling that it's "not really mine" is worth taking seriously as a planning signal, just not as an accounting rule. If you'd be devastated to touch that money for anything but tuition, treat it as functionally restricted in your own household budgeting. But keep it on the asset side of your net worth, the same way you'd keep a 401(k) there even though early withdrawal comes with real friction.

What actually happens if you leave it out

Leaving 529 balances off your net worth doesn't make them disappear. It just makes your tracked number quietly wrong, usually in a way that understates your progress.

Consider a family with two kids and $85,000 combined across two 529 accounts, opened when the kids were toddlers and now eight years into steady $300-a-month contributions plus market growth. If those accounts are excluded from net worth tracking, the household sees a number $85,000 lower than reality. That matters for two practical reasons. First, it distorts your sense of progress toward long-term goals; $85,000 is real, compounding money, and pretending it isn't there skews how close you actually are to whatever target you're tracking toward. Second, it makes year-over-year comparisons noisy. If you start including the accounts partway through, your net worth appears to jump for no real reason, which muddies the trend line that makes tracking useful in the first place.

The fix is simple: pick a rule and apply it consistently. Count 529 balances as assets, the same as any other investment account, from the first month you start tracking.

Contribution limits worth knowing

Two limits govern how much you can put into a 529 without tax consequences, and they're easy to conflate.

The annual gift tax exclusion is $19,000 per recipient for 2026, according to the IRS's 2026 inflation adjustments (reported by Kiplinger and multiple estate planning firms tracking the release). A married couple can each give $19,000, or elect gift-splitting to jointly give $38,000 to one 529 beneficiary in a single year without touching their lifetime gift and estate tax exemption or filing a gift tax return.

Superfunding lets you front-load five years of the annual exclusion into a single contribution. A single filer can contribute $95,000 to one beneficiary's 529 in one year (5 × $19,000), or a married couple can contribute $190,000, by electing on IRS Form 709 to treat the gift as spread evenly across five years for gift tax purposes. This is most useful for grandparents who received an inheritance or windfall and want to fund a grandchild's education in one shot rather than dribbling contributions in over a decade.

Neither limit caps how much the account itself can hold long-term; that's governed by state-specific aggregate limits, most of which sit well above $300,000 per beneficiary. The gift tax numbers above only govern how much you can contribute in a given year without additional paperwork or eating into your lifetime exemption.

What a 529 balance does to financial aid

This is where 529 ownership stops being an abstract accounting question and starts affecting real dollars.

Under the FAFSA's Student Aid Index formula, a parent-owned 529 account for the student filing the FAFSA is counted as a parent asset. Parent assets are assessed at up to 5.64% toward the SAI (after an asset protection allowance is subtracted), meaning roughly 5.64 cents of each dollar in the account reduces aid eligibility. A student-owned account, by contrast, is assessed at a flat 20% under the same formula, nearly four times the impact.

Grandparent-owned 529 accounts get the most favorable treatment: since the 2024 FAFSA Simplification Act took effect, distributions from a grandparent-owned 529 no longer count as untaxed student income on the FAFSA, and the account itself isn't reported at all. A grandparent funding a grandchild's education through their own 529 account, rather than gifting cash to the parents' account, can meaningfully preserve aid eligibility.

One more wrinkle worth knowing: under the simplified FAFSA rules, parents now only report the 529 account designated for the specific student filling out that FAFSA. If you have separate 529 accounts for two kids, only the account tied to the child applying for aid that year gets reported, not the sibling's account.

The 529-to-Roth rollover, and why it doesn't change how you track the balance

SECURE 2.0 added a new option in 2024: unused 529 funds can roll directly into the beneficiary's own Roth IRA, subject to real restrictions. The 529 account must have existed for at least 15 years. The lifetime rollover cap is $35,000 per beneficiary. Contributions and their earnings from the most recent five years aren't eligible. And the rollover amount in any given year still counts against that year's regular IRA contribution limit ($7,500 for 2026), so you can't dump $35,000 into a Roth in one shot; it has to trickle in over several years, and the beneficiary needs earned income equal to whatever is rolled over that year.

This option doesn't change anything about how you track the 529 while the money is still sitting in the account. It's still your asset, tracked at its current value, until the day it actually leaves the account, whether that's for tuition, a rollover, or a non-qualified withdrawal.

Tracking it without overcomplicating things

The practical approach: keep 529 accounts in your investment or education savings category, update the balance each time you check your other accounts, and don't try to net out some hypothetical "amount your kid will actually get to keep." The account value today is the asset. What happens to it in ten years is a separate question.

If you're tracking net worth for a household with kids, this is one more account that's easy to forget because there's no monthly statement forcing you to look at it the way a credit card bill does. A tracker that pre-fills last month's balance so an update takes a few minutes, the way updating your net worth in five minutes works at Steady Wealth, makes it much less likely a 529 quietly falls off your radar for a year at a time.

Frequently asked questions

Should I count my 529 in my net worth if I plan to give all of it to my kid?

Yes, for as long as the account is still in your name and under your control. Once money actually leaves the account for tuition or any other purpose, it's no longer your asset; that's the moment it drops off your net worth, not the moment you decided in your head that it "belongs" to your child.

Does a 529 count against me for financial aid the same way a brokerage account does?

No, and this is one of the few cases where 529 treatment is more favorable than a comparable taxable account. Both are counted as parent assets on the FAFSA, but the 529's tax-free growth for education expenses is a benefit a regular brokerage account doesn't offer, with no offsetting downside on the aid calculation.

What if grandparents opened the 529 instead of me?

Then it's the grandparent's asset, not yours, and it belongs on their net worth, not the parents'. Since the 2024 FAFSA Simplification Act, grandparent-owned 529s also no longer hurt the student's financial aid eligibility at all, making them one of the more aid-friendly ways to fund education costs.

Can I get my 529 contributions back if my kid gets a scholarship?

Yes, up to the scholarship amount, without the usual 10% penalty on the earnings portion (though the earnings are still subject to income tax). Beyond that specific carve-out, non-qualified withdrawals face both income tax and a 10% penalty on the earnings.