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What is the Most Money I Can Put Into a 529 Plan?

May 26, 2012

A 529 college savings plan is an investment account that lets you to save your child's college. The maximum contribution amounts differ between the two varieties of 529 plans

There is a prepaid tuition 529 plan which allows you to fund future college credits at the current price, according to the Securities and Exchange Commission. A college savings 529 plan, also known as an investment plan, doesn't "freeze" existing tuition prices, but allows you to invest a definite amount of money into a savings account that earns money over time.

Though you must pay normal income taxes on the dollar amount of your 529 investment plan contribution, any additional investment earnings are not taxed, according to the Marketwatch. However, because prepaid plans cannot earn money, they don't have this advantage.

A college savings 529 plan had a maximum contribution amount of more than $200,000 as of September 2010. Although no limit for a prepaid plan exists, you contribute funds into the account in a lump sum and installment format, based on the current age of the beneficiary and the number of years of college that you want to purchase.

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