5 Ways to Save on 529 Day
It’s almost the end of May, which means you’re likely looking forward to summer vacations, camps for the kids and a little pool time. Before your summer plans get into full swing, take a moment to celebrate 529 Day and set your kids up for future success long past this summer.
May 29th (5-29) is National 529 Day. The designation is designed to raise awareness about the importance of saving for future education costs. A 529 plan is a tax-advantaged investment tool that can help families save more for future education needs, including K-12 tuition, college tuition, apprenticeship expenses, room and board, technology needs, and much more. The Education Plan® offers a flexible, low-fee 529 plan that can be used by families anywhere in the U.S. There are no age limitations for who an account may be set up for, you can even open an account for yourself!
As the cost of education continues to rise, the importance of saving grows. Take these five steps this 529 Day to set your little ones (or yourself!) up for success in the future.
- Open a 529 Savings Account Opening an account with The Education Plan takes about 15 minutes, and there is no minimum initial contribution required. Studies show that with just $500 saved students are three times more likely to enroll in college and four times more likely to graduate from college than a child with no savings account. Opening an account is a simple step you can take this 529 Day to make sure you and your little ones are prepared for whatever the future brings.
- Set Up Gifting The cost of college grows every year. It can be daunting to think about saving enough on your own. That’s why The Education Plan offers easy gifting options. Once your account is set up, you can easily generate a code that you can send to loved ones so they can contribute to your 529 account. Ask for a contribution for birthdays, holidays, and other special occasions. You’ll be surprised how quickly your account can grow with a little help from friends and loved ones.
If you already have an account or if you’re setting one up for the first time, set up your gifting code and send it out to family and friends in honor of 529 Day. - Make an Extra One-Time Contribution If you already have a 529 account set up, celebrate 529 Day by making an extra contribution to your account. It can be a small amount or a large amount. Your future self will thank you. This extra contribution may even bring more benefits if your state offers a deduction or credit for contributions.
- Automate Your Savings Research shows that the best way to save for the future is the ‘set-it-and-forget-it’ method. You can choose a small amount that you can comfortably fit in your monthly budget. Maybe it’s just $5. Whatever amount works for your budget and education savings goals is a step in the right direction towards saving. With The Education Plan, you can set up your account to automatically deposit the amount you’ve selected from your checking account into your 529 savings account each month. Celebrate 529 Day by setting up automatic contributions and you can stick to your savings plan without the extra effort of remembering to contribute.
- Contribute to a Loved One or Friend’s 529 as a Gift Maybe you already have a 529 account set up and you’re making regular monthly contributions. If that’s you, congratulations! If your savings are swimming along, consider gifting a contribution to someone you love for 529 Day. Maybe it’s a niece or nephew, a grandchild, a godchild, or a friend’s child. When everyone has an opportunity for future education, everyone in your community benefits.
Frequently Asked Questions
A 529 plan is a tax-advantaged investment account that is designed to grow savings for future education expenses for a specified beneficiary. 529 plans offer unique benefits and features that make them an appealing strategy for education related saving.
A 529 plan can be used for “qualified educational expenses.” For federal tax purposes, qualified educational expenses include:
- Tuition and fees at accredited higher education institutions
- Books
- Supplies and equipment
- Room and board for beneficiaries attending on at least a half-time basis.
- Computer technology, equipment, and internet access
- Up to $10,000 a year for K-12 tuition and expenses (Limit increase to $20,000 in 2026)
- Expenses for educational special needs services
- Transfers to an ABLE account for the beneficiary (transfer subject to annual limit)
- Apprenticeship expenses
- Up to $10,000 for student loan repayment
- Credentialing expenses and certification programs
- Roth IRA rollover for the beneficiary
If you're not sure if an expense is considered "qualified," we recommend consulting with a tax professional or advisor. Unqualified expenses will be treated like ordinary income: state and federal taxes will apply, with a 10% federal penalty for withdrawals from your 529 plan used to pay for them.
New Mexico residents can deduct contributions to The Education Plan from their state taxable income each year. This includes contributions made to an account that you are not the account owner of.
You cannot deduct contributions from federal income taxes.
Any person at least 18 years old with a valid Social Security Number (SSN) or Tax Identification Number (TIN) can open a 529 account. The account holder chooses the investment options, designates a beneficiary, and requests the distribution of funds.
The cost of college continues to rise, including tuition, housing, food and supplies, so it’s important to begin saving as soon as possible. You can learn more about how much a typical college education costs on our Cost of College page. It’s never too early or too late to start.
The Education Plan offers a variety of investment options to fit you and your family’s needs, risk tolerance and goals. You can see all of the available investment portfolios on the investments page.
Yes, you can use up to $20,000* a year to cover tuition and expenses for K-12 education.
Qualified K-12 expenses include:
- Tuition (public, private, and religious)
- Curriculum materials, books (including digital/online) and instructional materials
- Tutoring and instructional classes**
- Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission
- Dual enrollment program fees
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies
*Starting in tax year 2026. The annual limit is $10,000 in tax year 2025 and permitted for tuition only.
**Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i) is licensed as a teacher in any State,
(ii) has taught at an eligible educational institution,
or (iii) is a subject matter expert in the relevant subject.
You can open an account with The Education Plan online or by mailing in the enrollment form. In order to open an account, you will need the following information:
- Your social security number or TIN
- Your address
- Your bank account information (in order to fund the account)
- The beneficiary’s social security number or TIN
- The beneficiary’s birthday
-The beneficiary’s address
