529 Education Savings Accounts: What Jockeys Should Know About Planning for the Future

For horseracing jockeys, education savings might not seem like a top priority—especially in the earlier stages of your career when your focus is on building your reputation and achieving success on the track. However, as your career grows, so do your opportunities to plan for the future, including the education of your children or other loved ones.

529 education savings accounts are a flexible, tax-advantaged way to prepare for future educational costs. Even if you’re not yet thinking about college or trade school, understanding how these accounts work can help you make smart financial decisions down the road. Let’s address some common questions and concerns about 529 plans, especially for jockeys who often face unique financial and career challenges.

1. What if my child gets a scholarship?

As a jockey, you know the value of hard work and dedication—and your child might achieve their own success in the form of a scholarship. If this happens, the money you’ve saved in a 529 account won’t go to waste. You can withdraw an amount equal to the scholarship without facing the usual 10% penalty for non-qualified expenses. You’ll only owe income taxes on the earnings portion of the withdrawal.

Alternatively, you can keep the money in the account for future use, such as graduate school or other educational needs. This ensures that the funds you’ve set aside continue to work for your family.

2. What if they don’t go to college at 18?

Many jockeys know that life doesn’t always follow a traditional timeline. If your child isn’t ready for college right after high school, there’s no need to worry. 529 accounts don’t have an expiration date, so the money can stay in the account until it’s needed. This flexibility gives your family time to figure out the right path, whether it’s a gap year, pursuing a professional career, or even joining the horseracing industry themselves.

3. What if they never go to college?

The question of “what if they never go to college” comes up often, especially for jockeys whose children might consider following in their parent’s footsteps within the horseracing world. While 529 plans are primarily designed for higher education, they can also be used for other qualifying educational opportunities, such as vocational or trade schools, apprenticeships, and eligible certificate programs.

If none of these options apply, you can change the account’s beneficiary to another family member, such as a sibling or even yourself if you want to pursue your own education or certifications later in life. If no one ends up using the funds for education, you can withdraw the money for other purposes, although earnings will be subject to income tax and a 10% penalty.

4. What if there’s money left over?

In some cases, families save more than what’s needed for education. If this happens, the leftover funds can remain in the account for future educational needs, such as graduate school. Starting in 2024, the IRS allows certain unused 529 funds to be rolled into a Roth IRA for the beneficiary, provided the account has been open for at least 15 years and other conditions are met. This creates an opportunity to repurpose the savings for retirement.

5. What if one child doesn’t need the money, but another does?

For jockeys with multiple children, this is a common question. Fortunately, 529 accounts allow for easy beneficiary changes among qualifying family members. If one child doesn’t use the funds, you can transfer the account to a sibling, cousin, or even a grandchild. This flexibility ensures the money you’ve saved continues to benefit your family.

6. What if my child pursues a career instead of education?

If your child decides to follow in your footsteps in the horseracing industry or pursue another professional career that doesn’t require a college education, the 529 funds can still be used in creative ways. For example, some vocational training programs may qualify as eligible expenses. If not, you could withdraw the funds for other purposes, with the understanding that taxes and penalties will apply to earnings.

7. Why should I think about this now?

Early in your career as a jockey, your focus might be on managing race schedules, securing mounts, and building financial stability. But as your career advances and your financial position strengthens, it’s important to think about long-term planning. A 529 account is a great way to ensure that your children enter adult life better off than you were—whether it involves college, trade school, or other educational paths.

Planning for Success Off the Track

As a jockey, you know the value of preparation and strategy. Just as you plan your races, planning your finances is crucial for long-term success. A 529 education savings account is one tool that can help you build a legacy for your family, no matter what paths they choose.

Whether you’re just starting your career or riding at the peak of your success, it’s never too early—or too late—to explore your financial options. If you have questions about 529 plans or other strategies to secure your family’s future, I’m here to help. Let’s work together to create a plan that works for you, both on and off the track.