tuition, books, computers, and some other expenses. Contributions are also taxadvantaged in Hawaii, but there is no state income tax deduction for contributions. Grandparents, family friends, and the student/beneficiary can also contribute. If the beneficiary decides not to go to college or use all of the money, the owner can also change the beneficiary to another child, or to an adult for a college or postgraduate degree. Recent legislation also allows for a partial conversion of 529 balances into Roth IRA contributions for the beneficiary. Coverdell Education Savings Accounts (ESAs) are college savings accounts, similar to 529 plans, where contributions grow tax-free, and withdrawals are not taxable when used for qualified education costs. ESAs may offer a greater range of investment options, in bonds, be a great way to boost your child’s college savings. When asked about gifts for birthdays or other special occasions, consider suggesting that grandparents or other relatives contribute to a college savings account or give money toward future education expenses instead of traditional presents. Of course, not everyone has this option, and it’s not a requirement to save for your child’s college. But if it’s possible, it can be a meaningful and valuable way to support their future. Take Advantage of Tax-Advantaged Savings Plans The following are a few vehicles to consider. 529 plan accounts allow assets to grow tax-free, with distributions tax-free at both the federal and Hawaii state levels as long as distributions go toward qualifying expenses. These can include college 138 HAWAII PARENT January/February 2026 Even small, regular contributions to a college fund can grow over time. “The earlier you can start, the less likely you are to “miss” the money you are contributing on a regular basis.”
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