Question 1

How much should I save in a 529 per month?

Accepted Answer

For a newborn targeting a public 4-year university at age 18, the current 4-year cost averages about $115,000 (tuition, room, board, fees). Inflating at 5%/year, that's roughly $283,000 in 18 years. To fully fund it: invest $550–$600/month for 18 years at 7% average return. To cover half, invest $275–$300/month. Most families target funding 50%–75% of projected cost, with the balance covered by financial aid, scholarships, and part-time work. Contributing anything is better than nothing — even $100/month becomes $43,000 over 18 years.

Question 2

What is the 529 contribution limit in 2026?

Accepted Answer

There's no annual contribution limit on 529 plans, but contributions are subject to gift tax rules. You can give up to $19,000/year per child in 2026 without gift tax implications ($38,000 if married filing jointly). 529s also allow 'superfunding' — contributing up to 5 years of gifts at once ($95,000 per contributor, or $190,000 per couple) without gift tax, as long as you make no additional gifts to that beneficiary for 5 years. State tax deductions for contributions vary — 30+ states offer some deduction for in-state plan contributions.

Question 3

Can 529 money be used for anything other than college tuition?

Accepted Answer

Yes — qualified expenses include: tuition and fees (K–12 up to $10,000/year, college unlimited), room and board (on-campus or comparable off-campus), required textbooks and supplies, computers and technology required for enrollment, student loan repayment (up to $10,000 lifetime per beneficiary). SECURE 2.0 added Roth IRA rollovers: starting in 2024, unused 529 funds can be rolled into a Roth IRA for the beneficiary (lifetime limit $35,000, account must be 15+ years old). This eliminates the 'overfunding trap' for most families.

Question 4

What if my child doesn't go to college?

Accepted Answer

You have several options. (1) Change the beneficiary to another family member — sibling, cousin, spouse, even yourself — with no taxes or penalties. (2) Under SECURE 2.0, roll up to $35,000 into a Roth IRA for the beneficiary (15-year account age requirement). (3) Withdraw for non-qualified expenses — you'll pay income tax plus a 10% penalty on earnings only (not contributions). The penalty and tax on earnings often total 20%–30% — still better than not having saved if the alternative was spending the money. 529s are considerably more flexible than they used to be.

Question 5

Which 529 plan should I use — my state's or another state's?

Accepted Answer

Only invest in your state's plan if it offers a state income tax deduction for contributions — check your state's rules first. For example, New York offers a $5,000/year deduction ($10,000 married), saving roughly $500–$800/year in state taxes. If your state has no income tax (TX, FL, WA, etc.) or no deduction, you're free to pick any state's plan. The top-rated plans by investment options and fees: Utah's my529, Nevada's Vanguard plan, and New York's Direct Plan. Low expense ratios (under 0.15%) matter a lot over 18 years.

529 College Savings Calculator

What You Should Know

Charts & Projections

Tax Breakdown

State Comparison

Lifetime Wealth Projection

Overview

529 Plan vs Other College Savings Options

529 vs Roth IRA for College

Starting Later? Still Worth It

Frequently Asked Questions

Sources & Methodology

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