Tax-free distributions for qualified education expenses
- Tax breaks from federal and some state governments
- Age-based and flexible investment options
- No income-based restrictions
- Prepaid tuition for some colleges
- Ability to use funds at various education institutions, including apprenticeship programs and trade schools
- High contribution limits
- Low setup costs
Parents are always inquiring about higher education for their kids and how to find the best 529 Plan for college education. This is a great article written by Forbes Advisors on just a few of the best plans they analyzed however, log in to Forbes to get the entire list that will help you in deciding the best plan for you.
Best 529 Plans Of 2023
For most parents looking for a way to save for their child’s college education, a 529 college savings plan is a wise choice. That’s because the money you invest in one of these accounts grows tax-free if you use the funds toward eligible education expenses. Individual states offer 529 plans. Below you’ll find a searchable map where you can find details for each state’s plan, along with its rating from our data partner, Savingforcollege.com. You’re not required to use your state’s plan; we’ve only included in our rankings the top-rated plans that consumers in any state can access.
New York’s 529 College Savings Program – Direct Plan – High contribution limit
In-state tax benefit – Up to $10,000 annual tax deduction
Plan highlight: Low fees
Why We Picked It:
New York’s 529 plan comes with a low flat-fee structure: All participants pay an annual program management fee of 0.13% of the account balance and no other fees. Participants can deduct up to $5,000 in New York State taxable income per year as an individual and up to $10,000 per year as a married couple filing jointly.
UNIQUE College Investing Plan (New Hampshire)
In-state tax benefit: None
Plan highlight: High contribution limit
Why We Picked It:
Also managed by Fidelity, New Hampshire’s 529 plan offers the same reasonable fee structure as Massachusetts’ plan, though its maximum contribution limit is significantly higher. In fact, it’s the highest contribution limit on our list, which makes it helpful if your child attends graduate school in addition to undergrad. Since New Hampshire doesn’t collect state income tax, there is no state tax break through the plan.
Bright Start Direct-Sold College Savings Program (Illinois)
In-state tax benefit – Up to $20,000 annual tax deduction
Plan highlight: Generous tax benefit
Why We Picked It:
Illinois’ 529 plan offers features that make it attractive for both in-state and out-of-state residents. Like the other plans on our list, funds can be used at any college, not just those in Illinois, and its fees are on the lower end. Most notably, Illinois residents get a generous state tax deduction of up to $10,000 to $20,000 per year, depending on their tax filing status.