How To Open a 529 Plan Before the Baby Is Born

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Mark Kantrowitz

By Mark Kantrowitz

December 1, 2023

It’s often a good idea to start saving for college early, as this allows investments to grow and earnings to compound over a longer period of time. Parents can even save for a child’s college education before the child is born, either by opening a 529 plan or saving the money in a taxable account.

Let’s explore these options in more detail.

Option 1: Opening a 529 Plan Before a Baby is Born

When you open a 529 plan, you must select a beneficiary for the plan. In most cases, this is the child who will use the funds in the 529 plan for future education expenses. However, a beneficiary must have either a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Neither of these is available before birth of the child.

To open a 529 plan before a child’s birth, a parent can name themself, or another relative, as the beneficiary. Then, once the baby is born and gets their own social security number, the parent can make the child the beneficiary. 529 plans allow the account owner to change the beneficiary to a family member, which in this case would be the newborn child. Essentially, it’s just shifting beneficiaries to the child without penalties.

You can also deposit or rollover funds into multiple 529 plans if there are multiple births. 

Option 2: Save with a taxable account

The second option is to save in a taxable account, such as an everyday savings account or investment account, and use it to make a lump sum contribution to a 529 plan after birth. 

Taxable accounts generally don’t have the same tax benefits of a 529 plan initially, but your 529 contributions may earn tax benefits, such as a state tax deduction, later. And once it’s time to pay for education expenses, 529 plans have many more advantages, such as tax-free withdrawals for qualified expenses.

Moving the money from a taxable account to a 529 plan is simple. Once your baby arrives and obtains their own social security number, they can become named as the beneficiary of a new 529 plan you open. From there, it’s a simple contribution from your established savings or investment account.

How to open a tax-advantaged 529 plan

You can start by checking out what your home state’s 529 plan offers. Over 30 states offer a tax credit or deduction for 529 plan contributions, which can help boost your savings. 

It’s also important to consider the plan’s fees and available investment options. Once you’re ready to enroll, you can sign up directly through the plan’s website or with a financial advisor and link your bank account to start making contributions. 

Apps to Get You Started

You can open a 529 plan with Backer or link an existing 529 plan. As you buy everything you need for your new addition, shop through their links to get cash back on purchases. Plus, you can set up a gifting page and ask family and friends to pitch in from the start. 20% of users on Backer are saving for an unborn child.

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At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

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