College costs continue to rise, but with the right strategy, you can stay ahead. A 529 plan is one of the most effective ways to save for education while taking advantage of powerful tax benefits.
A 529 plan is a tax-advantaged investment account designed to help families save for qualified education expenses. These plans allow your contributions to grow tax-deferred, with tax-free withdrawals when used for eligible costs. 529 plans can be used for college tuition and fees, room and board, books and supplies, computers and technology, K-12 private school tuition, trade schools, and graduate programs.
Families often choose 529 plans for three key reasons: tax advantages, estate planning benefits, and flexibility.
One of the primary benefits of a 529 plan is its favorable tax treatment. Contributions grow on a tax-deferred basis, and withdrawals are tax-free when used for qualified education expenses. In addition, many states offer income tax deductions or credits for contributions, providing an added layer of savings.
A 529 plan can also play a valuable role in estate planning. Contributions are removed from your taxable estate, which may help reduce potential estate taxes. In addition, the ability to “superfund” allows you to front-load up to five years’ worth of gifts at once, providing a strategic way to transfer wealth efficiently.
529 plans offer a high degree of flexibility, allowing you to adapt as your family’s needs evolve. You can change the beneficiary at any time, use funds across a wide range of qualified education options, and even roll over unused funds into a Roth IRA, subject to IRS rules and limitations.
Contributing early allows your money more time to grow and benefit from compounding in the market, rather than relying on out-of-pocket payments later. A 529 plan is a strong option for many families, offering meaningful tax advantages and flexibility. It can also serve as an effective estate planning tool for high-net-worth individuals.
Lindsey Johns, CFP®
Wealth Advisor
in AUM (as of 3/31/2026)
Families & Individual Clients
Employee & Family Owned
Understand how 529 plan contribution limits work in 2026, what happens to unused funds, and how much you should realistically save for future education costs.
You can give $19,000 per year per beneficiary (or $38,000 for married couples) without triggering gift tax reporting. Additionally, you can contribute up to $95,000 ($190,000 for couples) in a single year by front-loading five years of gifts (aka “Superfunding”).
If your child doesn’t use all the funds, you can repurpose the funds by changing the beneficiary on the account, roll over up to $35,000 into a Roth IRA (subject to IRS rules), use funds to repay up to $10,000 in student loans, or simply keep the funds for any future educational endeavors.
Determining how much to contribute to a 529 plan depends on several key factors, including how many years until your child begins their education and whether you plan to use the funds before, after, or during college. Speak with your financial advisor to talk through your goals.
If funds are not used for the original beneficiary, you can change the beneficiary to another family member, keep the account for future education needs, or potentially roll over unused funds into a Roth IRA, subject to IRS rules and limits.
There are no annual federal contribution limits, but contributions are subject to gift tax rules. In 2026, individuals can generally contribute up to $19,000 per beneficiary annually ($38,000 for married couples), with the option to “superfund” up to five years of contributions at once.
Many states offer tax incentives for contributions. For example, Illinois allows up to a $10,000 annual deduction for individuals and $20,000 for married couples filing jointly, but only for contributions to Illinois-sponsored 529 plans.
The account is owned by the person who opens it, typically a parent or grandparent, not the student. This means the owner maintains control over investment decisions and distributions.
The earlier you start, the more time your money has to potentially grow through compounding. Starting early can also reduce the need for larger out-of-pocket contributions later as college approaches.
The earlier you start, the more you can benefit from long-term growth and compounding. Let’s create a strategy that helps you save confidently for your child’s future.
