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Do 529 plans have annual contribution limits?

Unlike other tax-advantaged accounts, such as individual retirement accounts (IRAs), 529 plans don’t have annual contribution limits. Instead, they have aggregate lifetime limits, and the maximum amount allowed varies by state.

What is a state 529 limit?

The limits are intended to allow coverage of all college costs that are considered qualified higher education expenses. Once the combined balances of a beneficiary’s in-state 529 plans hit the state’s aggregate limit, no additional contributions can be made to any 529 plan administered by that state.

How much can you save on a 529 plan?

While 529 plan vendors don’t limit you to a certain amount you can save per year, they will institute an aggregate limit. That means you can only contribute up to a certain maximum amount per beneficiary.

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