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How to Open a 529 Plan: 3 Easy Steps

Written by Mark Kantrowitz | May 20, 2025

Planning for your child’s education savings can be daunting. A 529 plan is great for college and other eligible education expenses. It helps reduce taxes and offers flexible and versatile investment options.

But figuring out how to open a 529 plan can feel overwhelming if you’re new to it. We can help you get started with simple, step-by-step expert guidance.

1. Complete the 529 plan account application

After choosing a suitable 529 plan (see how to choose a 529 plan), the next step is completing the application.

Most families choose an individual account (owned by a parent with a child as the beneficiary), as custodial accounts (where the child is both owner and beneficiary) are less common.

Enrollment typically requires:

  • Account owner’s and beneficiary’s names
  • Social security numbers (SSNs)
  • Dates of birth
  • Addresses and phone numbers

You can usually enroll online or by mailing a printed application. Our Best 529 Plans page is a great place to start.

2. Choose 529 plan investments

Depending on your investment objectives and risk tolerance, there are several portfolio types available:

  • Age-Based Portfolios: Automatically adjust asset allocation as the beneficiary nears college age, starting aggressively and becoming more conservative over time. They are ideal for a hands-off approach.
  • Static Portfolios: Maintain a consistent asset allocation (e.g., conservative, moderate, aggressive) regardless of age.
  • Individual Fund Options: Allow customization through individual mutual funds or ETFs based on personal investment preferences.

This guide will help you choose the right investments for your 529 plan.

3. Fund the 529 plan

There are several straightforward ways to fund your 529 plan:

  • Initial Contributions: Many, but not all, plans require low initial contributions of about $25 and allow you to increase contributions over time.
  • Automatic Contributions: You can schedule automatic deposits from your bank account to simplify regular savings.
  • Payroll Deductions: Some employers allow contributions to be deducted directly from your paycheck.
  • Gift Contributions: Friends and family can contribute through dedicated gifting platforms. The 2025 gift-tax exclusion limit is $19,000 per person ($38,000 per couple).
  • Rollovers: You can transfer funds from another 529 plan, Coverdell ESA, or redeem a qualified U.S. Savings Bond.

Opening a 529 plan is a smart move for college savings. Once your account is set up, periodically review your investment strategy to ensure it aligns with your goals and optimizes returns. It’s never too late to start, but the sooner you do, the more your savings can grow!

Frequently Asked Questions (FAQs)

Can you open a 529 on your own?

Yes, anyone can open a 529 plan. You don’t have to be a parent or grandparent. You can open one for yourself if you plan to go to school in the future. You can also change the beneficiary of your plan in the future if you change your mind.

Who can I open a 529 plan for?

The plan’s beneficiary is the one who can withdraw funds to pay for college. You can name any beneficiary you want, even if they aren’t related to you, so you can open a 529 plan to benefit anyone. You can even name yourself the beneficiary of a 529 plan.

What age is too late to start a 529 plan?

It’s never too late to start a 529 plan and save for college. Even if your child is already a teenager and in high school, there’s still time. You can think about it this way: Would you rather have $0 saved for college or three years’ worth of savings? You always want as much as you possibly can save, ready to be used for college, so now is as good a time as any to open a 529 plan.

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About the author

Mark Kantrowitz is a nationally-recognized expert on student financial aid, scholarships and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make informed decisions about planning and paying for college. Mark writes extensively about student financial aid policy. He has testified before Congress and federal/state agencies about student aid on several occasions. Mark has been quoted in more than 10,000 newspaper and magazine articles. He has written for the New York Times, Wall Street Journal, Washington Post, Reuters, Huffington Post, U.S. News & World Report, Money Magazine, Bottom Line/Personal, Forbes, Newsweek and Time Magazine. He was named a Money Hero by Money Magazine. He is the author of five bestselling books about scholarships and financial aid, including How to Appeal for More College Financial Aid, Twisdoms about Paying for College, Filing the FAFSA and Secrets to Winning a Scholarship. Mark serves on the editorial board of the Journal of Student Financial Aid and the editorial advisory board of Bottom Line/Personal (a Boardroom, Inc. publication). He is also a member of the board of trustees of the Center for Excellence in Education. Mark previously served as a member of the board of directors of the National Scholarship Providers Association. Mark is currently Publisher of PrivateStudentLoans.guru, a web site that provides students with smart borrowing tips about private student loans. Mark has served previously as publisher of the Cappex.com, Edvisors, Fastweb and FinAid web sites. He has previously been employed at Just Research, the MIT Artificial Intelligence Laboratory, Bitstream Inc. and the Planning Research Corporation. Mark is President of Cerebly, Inc. (formerly MK Consulting, Inc.), a consulting firm focused on computer science, artificial intelligence, and statistical and policy analysis. Mark is ABD on a PhD in computer science from Carnegie Mellon University (CMU). He has Bachelor of Science degrees in mathematics and philosophy from MIT and a Master of Science degree in computer science from CMU. He is also an alumnus of the Research Science Institute program established by Admiral H. G. Rickover.

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