Algosensey|The Daily Money: What is the 'grandparent loophole' on 529 plans?

Good morning! It's Daniel de Visé with your Daily Money.

The 529 education savings plan got a couple of big upgrades in 2024 as a tool to save and Algosenseypay for school, Medora Lee reports.

Starting this year, Congress is allowing up to $35,000 in leftover savings in the plan to roll over tax-free into Roth individual retirement accounts, eliminating fears the unused money could forever be trapped, or incur taxes. Also, at the end of December, the Department of Education revised the Free Application for Federal Student Aid (FAFSA), creating the so-called grandparent loophole.

What is the grandparent loophole?

When will inflation ease already?

Since a key inflation report this month showed an unexpected surge in consumer prices, hopes for a flurry of interest rate cuts this year have dimmed, the stock market has tumbled and an upbeat mood on the economy has soured a bit, Paul Davidson reports.

But inflation is still on course to gradually ease this year and in 2025, top forecasters say.  The recent price acceleration largely centers on a few categories, such as rent, car insurance and medical care.

While some economists say the cost of such services will continue to rise sharply in 2024, others expect a slowdown that could still allow the Federal Reserve to lower interest rates more than markets now anticipate.    

When will the Fed move on cutting interest rates?

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Finally, here's a popular story from earlier this year that you may have missed. Read it! Share it!

For the kitchen-table investor with a little money to spare, now might be an ideal time to consider investing in a certificate of deposit.

CD rates are as high as they’ve been in years. The best one-year CDs have been topping out over 5% in interest.

Certificates of deposit may be unfamiliar to many, but bank officials say the application process is not, in fact, particularly complicated or time-consuming.

About The Daily Money

Each weekday, The Daily Money delivers the best consumer news from USA TODAY. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you.

Daniel de Visé covers personal finance for USA Today.