10 Best 529 Plans for 2027 and Beyond

Saving for education can feel like a race against rising tuition costs, but 529 college savings plans offer families a powerful way to stay ahead. These state-sponsored programs combine tax advantages and flexible investment choices  with long-term growth potential, making them one of the most effective tools for funding future education expenses. With dozens of plans available nationwide, choosing the best 520 plans can help you meet your savings goals so you do not fall short.

If you are planning for your family’s education, a financial advisor can help you create a financial plan to pay your education expenses.

What Is a 529 Plan?

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. Legally known as qualified tuition plans, they are sponsored by states, state agencies or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

Generally, there are two types of 529 plans: prepaid tuition plans and education savings plans.

• Prepaid tuition plans. Prepaid tuition plans allow you to essentially buy credits at specific participating schools. 
• Education savings plans. With education savings plans, you can open a 529 plan to use for a variety of future educational payments. 

The IRS does not impose yearly contribution limits. That is done by individual states, which base contribution limits on aggregate contributions. Some states, however, also impose annual contribution limits for 529 plans. Each state, except Wyoming, sponsors at least one of these savings vehicles, as does Washington, D.C. 

Money you contribute to these plans comes from after-tax dollars, so your contributions can reduce your taxable income. Your money grows tax-free, and there are no taxes if you withdraw money for 529 qualified educational expenses, such as tuition.

Some states allow you to take additional tax deductions or credits based on how much you contribute. However, the advantage of a 529 plan is that you are not limited to investing in the 529 plan sponsored by your state; instead, you are free to enroll in any program you wish. 

With that said, not all 529 plans are created equal. Some charge high fees and offer poorly performing investment options, which is why it is important to find the right one for your budget.

Federal Gift Tax Considerations for 529 Plans

Although 529 plans are governed by state rules, you should still be aware of the federal gift tax exemption, which changes yearly.

In 2026, the annual gift tax exemption is $19,000. This means that a married couple can give $38,000 ($19,000 x 2) per recipient that year. For example, if a married couple has two children and six grandchildren, they may give $304,000 in 2026 without affecting their joint $30 million overall tax exemption, which is the $15 million estate tax exemption for 2026 multiplied by two.

Choosing the Best 529 Plans

Selecting the right 529 plan begins with understanding your personal savings goals, tax status and investment strategy. Each state-sponsored plan has unique features, including different fee structures, investment options and potential in-state tax benefits. 

For many families, the most compelling reason to choose their own state’s plan is the ability to deduct contributions from state income taxes. However, if your state offers no tax deduction or its plan is high in fees, it may be worth considering top-rated out-of-state options with better performance histories and lower costs.

Low fees are a critical factor because they directly impact how much of your money stays invested to grow over time. Plans managed by firms known for cost efficiency, such as Vanguard or Fidelity, can help maximize returns for a bigger tax return by minimizing administrative and investment expenses. 

Performance also matters, but it should be evaluated over the long term to get a clearer picture of how consistently a plan delivers value. Look at five- to 10-year returns rather than short-term market swings.

Ultimately, the best 529 plans align most closely with your family’s timeline, tax strategy and comfort with investment risk. Whether you prioritize low fees, strong long-term performance, generous tax benefits or investment flexibility, taking the time to compare options can pay off significantly in the future.  These are the best 529 plans overall, but keep in mind that some benefits might only be available if you live in the state of the plan. 

Data and Methodology

We identified the plan options below through exhaustive research and analysis of the college savings and 529 market. They are listed in an order that’s in direct correlation with their individual composite score based on our methodology, which includes how much the accounts typically charge in fees and what the state tax benefit is for each plan.

You may have to live in the state the plan originated from in order to benefit from the state tax benefit, but that was not factored into the methodology ranking.

1. South Carolina Future Scholar 529 Direct

South Carolina’s Future Scholar 529 Direct Plan combines low investment expenses with a generous state income tax deduction, making it especially attractive to eligible South Carolina families. There is no minimum investment required to open an account, and you can set up automatic contributions to build savings gradually. The direct plan lets you select investments without purchasing through a financial advisor.

The plan offers three investment approaches: age-based portfolios, target-allocation portfolios and single-fund portfolios. Age-based options automatically become more conservative as college approaches, with conservative, moderate and aggressive tracks available. Alternatively, you can select a portfolio with a set allocation or build your own mix using individual investment options.

South Carolina taxpayers can deduct 100% of eligible contributions to Future Scholar from their state taxable income, including contributions to someone else’s account. Contributions made by the state tax filing deadline may qualify for the prior year’s deduction. This reduces taxable income rather than providing a dollar-for-dollar tax credit, while qualified education withdrawals receive federal and South Carolina income tax advantages.

Enrollment restrictions are an important consideration. The direct plan generally serves South Carolina residents, out-of-state account owners naming a South Carolina resident as beneficiary and certain eligible employee groups. Families outside those categories should compare plans available to them, including any tax benefits offered by their home state.

2. Kansas Quest529

Kansas Quest529 combines low investment costs with flexible portfolio choices and additional incentives for eligible Kansas families. The direct-sold plan is open to investors nationwide, and you can start an account with any amount. That makes it accessible to families beginning with small contributions as well as those transferring existing education savings.

Investment options include enrollment-year portfolios, multi-fund portfolios and individual-fund portfolios. Enrollment-year portfolios automatically become more conservative as the beneficiary approaches the expected year of enrollment. Investors who prefer more control can choose a portfolio with a particular risk level or combine individual options covering U.S. stocks, international stocks, bonds and principal preservation.

Kansas taxpayers can deduct eligible contributions of up to $3,000 per beneficiary annually, or $6,000 for married couples filing jointly, from Kansas taxable income. However, Kansas also allows this deduction for contributions to other states’ qualifying 529 plans. Residents can therefore compare Quest529’s costs and investments with competing plans without automatically giving up the state deduction.

Quest529 offers an additional advantage through the Kansas Investments Developing Scholars (KIDS) Matching Grant Program. Eligible Kansas families can receive a dollar-for-dollar match of up to $600 annually, subject to income and other program requirements. Families must apply and qualify each year, making this a potentially valuable benefit to review alongside the plan’s investment options and fees.

3. West Virginia Smart529

West Virginia’s SMART529 WV Direct plan offers low costs, no minimum contribution requirements and a substantial state tax benefit for eligible families. It is available to West Virginia residents and out-of-state account owners whose beneficiary lives in West Virginia. The program also offers separate Select and advisor-sold plans, so confirm that you are comparing the WV Direct option when reviewing fees and investments.

Investors can choose from nine age-based portfolios, five static portfolios, a Stable Value Portfolio and a 500 Index Portfolio. Age-based portfolios adjust their investment mix as the beneficiary gets older, while static portfolios let you maintain a chosen investment approach. This gives families options for automatic adjustments or greater control over their allocation.

West Virginia taxpayers can generally deduct the full amount of eligible SMART529 contributions when calculating their state taxable income, without an annual dollar cap on the deduction. Qualified education withdrawals also receive federal and West Virginia income tax advantages. However, nonqualified withdrawals can trigger taxes, penalties and recapture of previously claimed state deductions.

Eligible families may also receive a $100 contribution through the Bright Babies program when opening an account for a qualifying West Virginia child. Combined with the plan’s low fees and state deduction, this incentive can help families start saving early. Families should check the program’s enrollment deadlines and eligibility requirements before applying.

4. Minnesota College Savings Plan

The Minnesota College Savings Plan, also known as MNSAVES, offers low-cost investment options and a choice of state tax incentives for eligible Minnesota taxpayers. The direct-sold plan is open to investors nationwide, and accounts can generally be opened with $25. Families can contribute regularly while retaining flexibility to use their savings at eligible institutions outside Minnesota.

Investment choices include enrollment-year portfolios, risk-based allocation portfolios and individual investment options. Enrollment-year portfolios automatically adjust their investment mix as the expected enrollment date approaches. Investors who prefer to choose their own approach can select among stock, bond, money market and principal-plus-interest options.

Minnesota taxpayers may qualify for either an income tax subtraction or a contribution credit. The subtraction is capped at $3,000 annually for married couples filing jointly and $1,500 for other filing statuses. Alternatively, eligible taxpayers can receive a credit equal to 50% of qualifying contributions, up to $500, subject to income-based limitations; taxpayers cannot claim both benefits for the same year.

These state incentives also apply to eligible contributions to other states’ 529 plans, giving Minnesota residents room to compare costs and investment choices. Families should also consider how they intend to use the money: Minnesota’s tax treatment does not fully match federal rules for certain withdrawals, including K–12 and postsecondary credentialing expenses. Those uses can create state taxes or recapture of previously claimed benefits even when federal tax advantages apply.

5. Iowa ISave 529

Iowa’s ISave 529 offers straightforward pricing, Vanguard-managed investments and a state income tax deduction for eligible Iowa account owners. The direct-sold plan lets families open and manage accounts without a financial advisor. You can get started with $25, making it accessible to families building education savings through smaller, regular contributions.

Families can choose enrollment-based investments that automatically become more conservative as the expected withdrawal date approaches. Investors who prefer to build their own allocation can select from individual portfolios and combine up to five options. Vanguard serves as investment manager, while Ascensus provides account recordkeeping services.

For 2026, eligible Iowa taxpayers who own accounts can deduct up to $6,100 in contributions per beneficiary account from Iowa taxable income. For example, two parents who each own and contribute to separate accounts for two children could deduct up to $24,400 combined. The deduction limit adjusts annually for inflation, so families planning 2027 contributions should verify that year’s amount rather than assume the 2026 limit applies.

Iowa also allows qualifying contributions made by its state income tax filing deadline to count toward the prior year’s deduction. Account owners can manage savings online or through the READYSAVE 529 app and invite contributions through Ugift. Families outside Iowa should compare ISave’s fees with any tax benefits available through their own state’s plan.

6. Georgia Path2College 529 Plan

Georgia’s Path2College 529 Plan combines low investment costs with a substantial state income tax deduction for eligible Georgia taxpayers. The direct-sold plan is open to investors nationwide, and its savings can be used at eligible institutions in Georgia, other states and abroad. Families can also keep their accounts and continue contributing after moving out of Georgia.

Investment choices include enrollment-year portfolios that automatically adjust their allocations as the expected enrollment date approaches. Families who prefer to choose their own investment approach can select static portfolios, including stock, bond and principal-plus-interest options. This provides flexibility to match investments with the beneficiary’s timeline and the account owner’s comfort with risk.

Georgia taxpayers can generally deduct eligible Path2College contributions of up to $8,000 per beneficiary annually when filing jointly, or $4,000 for other filing statuses. For example, a married couple contributing $8,000 for each of two children could deduct up to $16,000 from Georgia taxable income. This is a deduction from income rather than a dollar-for-dollar reduction in the tax bill.

Under current rules for 2026 through 2030, Georgia also permits smaller deductions for contributions to certain other states’ plans that meet reciprocity requirements. However, Path2College retains the higher deduction limits, giving Georgia families a reason to consider it alongside its low fees. Investors outside Georgia should compare those costs with any tax incentives available through their own state’s plan.

7. Michigan Education Savings Progam

The Michigan Education Savings Program, or MESP, offers low-cost investments and a state income tax deduction for eligible Michigan taxpayers. This direct-sold 529 plan is open to investors nationwide, with accounts available for an initial contribution of $25. Savings can be used at eligible institutions outside Michigan, giving families flexibility as their education plans develop.

Investment choices include enrollment-year portfolios that automatically become more conservative as the beneficiary approaches college. Families can also choose multi-fund allocation portfolios or individual options focused on stocks, fixed income and principal preservation. These choices accommodate investors who want automatic adjustments as well as those who prefer to select their own allocation.

Michigan taxpayers can generally deduct eligible net contributions of up to $10,000 annually for married couples filing jointly or $5,000 for single filers. These limits apply per tax return, rather than separately for each beneficiary. Qualified withdrawals made during the same tax year reduce the contribution amount eligible for the deduction, and incoming transfers from another 529 plan do not qualify.

Families should also review Michigan’s withdrawal rules before using savings for expenses beyond higher education. K–12 withdrawals can qualify for federal tax-free treatment while triggering Michigan income tax on earnings and recapture of state deductions. That distinction makes the intended use of the account an important consideration alongside fees and contribution benefits.

8. New York 529 Plan (New York’s 529 College Saving Program)

The New York 529 College Savings Program has reduced the total annual asset-based fee on all its portfolios to 0.11%. This makes the New York 529 plan one of the most inexpensive in the nation. In addition, New York families can deduct up to $10,000 from their state income tax each year. Unlike most 529 plans, the program does not charge additional fees for out-of-state  saveres. 

Your investment options include 22 Target Enrollment Portfolios s based on specific risk profiles. In addition, you can build your own investment mix using individual portfolios. These provide exposure to asset classes, such as stock funds, short-term reserves and mixes of multiple classes.

There is no minimum requirement to open a New York 529 plan, and you can contribute up to $190,000.  Employers can also set up payroll deductions toward employees’ 529 plan accounts at no cost to the company.

9. Maine NextGen 529

Maine’s NextGen 529 stands out for its matching grants, which can give eligible families an immediate boost to education savings. The program offers three account types: Connect for a simplified investment approach, Direct for investors who want more choices and Select for those working with a financial advisor. Accounts generally require a $25 initial contribution, with exceptions for certain Alfond Grant recipients.

The Direct account offers enrollment-year portfolios, diversified portfolios, single-fund portfolios and options designed to preserve principal. Enrollment-year portfolios automatically adjust their investments as the expected education date approaches. Direct accounts have no upfront sales charges or annual account fees, although portfolio expenses apply and vary by investment choice.

Eligible Maine taxpayers can also deduct contributions of up to $1,000 per beneficiary annually from state taxable income. The deduction is available when federal adjusted gross income does not exceed $100,000 for single filers or married people filing separately, or $200,000 for joint filers and heads of household. Contributions to other states’ qualifying 529 plans can receive the same deduction, so this tax benefit is not exclusive to NextGen.

Qualifying Maine accounts may also receive a rebate of the Maine administration fee, subject to balance and other requirements. Together, the grants and potential fee rebate make NextGen particularly worth evaluating for Maine families. Compare the expenses of the specific account and portfolio you choose, and verify grant terms for 2027 because incentives can change.

10. New Mexico The Education Plan

New Mexico’s The Education Plan offers flexible investment choices and a full state income tax deduction for eligible New Mexico contributions. The direct-sold plan is available to residents nationwide, and you can open an account without an initial contribution. Families can then save at their own pace through recurring deposits, payroll contributions or gifts from relatives and friends.

Investment options include year-of-enrollment portfolios, allocation portfolios and individual portfolios. Year-of-enrollment investments automatically become more conservative as the beneficiary approaches the anticipated education date. Alternatively, families can choose an allocation matching their risk tolerance or build their own mix using individual portfolios.

For New Mexico residents, eligible contributions are fully deductible from state taxable income, with no annual dollar cap on the deduction. Contributors may qualify even when they put money into someone else’s account. This benefit reduces taxable income rather than taxes dollar for dollar, and nonqualified withdrawals can require previously deducted contributions to be added back to state income.

The combination of an uncapped state deduction and several investment approaches makes The Education Plan worth considering for New Mexico families. Investors elsewhere should compare its portfolio expenses and account fee waiver with their home state’s tax incentives. Choosing electronic delivery can help avoid an additional fixed cost, particularly when the account balance is small.

What Happens to Your 529 if Your Child Doesn’t Go to College?

One of the most common concerns parents have is: What if my child decides not to go to college? 

Fortunately, a 529 plan offers flexibility, even if your original beneficiary does not use the funds. If your child does not attend college, you have several options.

• Transfer the account to another family member: You can change the beneficiary to a sibling, cousin, spouse or even yourself without tax penalties.
• Use the funds for graduate school: If your child eventually decides to pursue a master’s or professional degree, 529 funds can still be used for tuition, fees and other qualified expenses.
• Use it for your own education: Parents can also become the beneficiary and use the funds for their own degree or training program.
• Withdraw the funds: If you take money out for non-qualified expenses, you will owe income tax on the earnings, plus a 10% penalty on those earnings (but not on the contributions).

Keep in mind that up to $10,000 of a 529 can also be used to pay off student loans for the beneficiary or their siblings. While you will lose some of the tax advantages if you withdraw the funds for non-education purposes, the money you contributed is always yours.

529 vs. Other College Savings Options

While 529 plans are popular for education savings, they are not the only option for college savings plans. Here is a college savings plan comparison table to help you make the right choice for you:

For most families, a 529 plan offers the best combination of tax benefits and flexibility. However, if you want more control over how funds are spent or you anticipate that your child will need funds for purposes beyond education, you might consider supplementing with a custodial account or brokerage account.

Bottom Line

Investing in a 529 plan is a great way to start saving for your child’s future college education as soon as possible. There are some decent tax breaks, to boot. In addition, your child can still qualify for financial aid, even if you have built a hefty 529 account balance over the years. 

Almost all states sponsor at least one of these plans, but they are not all great. The best 529 plans offer generous 529 plan benefits with major tax incentives and high contribution limits. Moreover, they provide a diverse investment menu. 

No rule says you have to invest in one sponsored by your state, so be sure to shop around. By weighing each plan carefully, you can select a plan that not only supports your education savings goals but also adapts to the evolving needs of your family.

Tips on 529 Plan Investing

• If you’re looking for ways to invest in your family’s education, a financial advisor can help you create a financial plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Tax breaks are some of the strongest incentives for investing in a 529 plan. However, there are some 529 plan rules you must follow in order to make the most out of your savings. For instance, you have to use your withdrawals on 529 plan qualified expenses. Otherwise, you’ll face some major tax penalties.

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