The Best 529 Plans for 2023 and Beyond

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With student loan debt at record levels, American families are seeking more ways to help their children save for higher education sooner rather than later. One solid option is investing in a 529 college savings plan. Let’s break down the best 529 plans going into 2023. If you’re thinking about financing your family’s education, a financial advisor can help you create an education financial plan.

What Is a 529 plan?

This plan is a tax-advantaged savings plan designed to encourage saving for future education costs. Legally known as “qualified tuition plans,” they are sponsored by states, state agencies or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Generally, there are two types of 529 plans – prepaid tuition plans and education savings plans. The former lets you essentially buy credits at specific participating schools; the latter lets you open an account that can be used for a variety of future educational payments. The IRS does not impose yearly contribution limits. That is done by individual states, which base contribution limits on aggregate contributions. Some states, however, also impose annual contribution limits.