529 Plan Contribution Limits in 2023 [Video]

A 529 savings plan can help you defray the costs of higher education for yourself or a family member by allowing invested money to grow tax-free when used for qualified educational expenses. Every state offers a 529 plan, and investors can choose from any of them, but each comes with contribution limits. Each 529 plan has a maximum contribution limit, which varies heavily by state.

Families need to save as much as possible as early as possible to get ahead of rising education costs. According to research from the College Board, the average cost of attending a public four-year college, including tuition and fees, in the 2022 and 2023 school years was $11,260 for an in-state student and $29,150 for out-of-state students. A year at a private college was even more: $41,540.

Named after the section of the Internal Revenue Service (IRS) code that established them, 529 savings plansare one of the …