How to Pilfer the 529 College Savings Plan for Cruise Line Trip(s) Without Tax Penalty

Have you been saving laboriously in a 529 plan? What if your intended beneficiary gets a scholarship? How can you pilfer the funds without tax penalty and spend them on yourself in retirement? I'll specifically address using 529 plans for pseudo-cruise line trips after a giving you my opinion and brief subject overview.

I'm not a proponent of 529 plans, unless you've already met your retirement savings goals; however, they do serve a purpose. I hope you know that contributions can be made to 529 plans even if you don't have children. In this case, it would be presumed that you would be the one using the money to go to school. You're always suppose to be learning so this is somewhat plausible.

Non-taxable 529 Plan disbursements can be made not only for tuition but room and board expenses at the local school, even if you don't live and eat on campus. You simply have to take a course load that's 1/2 full time. In some Junior Colleges and distance learning programs 1/2 full time is as little as 4 credit hours.

Ok, now to subject of this posting, there are college programs at sea that are on cruise liners and include numerous recreational ports of call. Consider the following program if you want a legitimate way of pilfering the 529 plan and concurrently going on an extended cruise line trip:

Semester at Sea <- This program is associated with the University of Pittsburgh.

Read this for a write up on general college at sea programs. Generally, this strategy is good only if you want to take an extended vacation (likely in retirement years) and don't mind taking a couple of classes.

I personally have looked at the IRS publications on 529 plans and believe the semester at sea programs falls within the purview of valid 529 disbursements. That stated, i’m not a tax professional. Recommend re-verifying this post via the appropriate IRS publication or a tax professional before actually doing it.