Celebrating 529 Day – Boost Your College Savings
As higher education costs continue to rise, finding effective ways to save for college becomes increasingly important. May 29 (5/29) is a national day of awareness for 529 college savings plans. It’s a day to reflect and a reminder for families to evaluate their education savings strategies.
What Is 529 Day?
529 Day, observed on May 29 (5/29), is a day dedicated to raising awareness about 529 college savings plans. The date matches the name of these tax-advantaged education savings accounts established under Section 529 of the Internal Revenue Code.
Many states and financial institutions use this day to promote 529 plans through special events, webinars, and even matching contribution programs.
Why 529 Plans Matter
College costs have outpaced inflation for decades. Average tuition and fees at private ranked colleges increased by about 5.5 percent over the last year, according to data for the 2024-2025 school year.
The average annual tuition and fees for in-state students at public colleges is $11,610, while out-of-state undergraduates pay around $30,780.
“Starting early with 529 plan contributions can make a huge difference,” says Richard Lerner, Senior Vice President of David Lerner Associates. “Even modest monthly deposits grow over time thanks to compounding and tax benefits, potentially reducing reliance on student loans.”
Key Benefits of 529 Plans
529 plans offer features designed to support education savings more effectively than general savings accounts:
Tax-free growth: Your investments grow free from federal income tax
- Tax-free withdrawals: Money used for qualified education expenses comes out tax-free
- State tax benefits: Many states offer income tax deductions for contributions
- Flexibility: Funds can be used at most accredited colleges and trade schools nationwide
- Expanded uses: Recent laws allow 529 plans to pay for K-12 tuition and student loan repayments.
How to Make the Most of 529 Day
529 Day is the perfect time to take action on college savings:
- Start a plan: If you haven’t opened a 529 account yet, this day often brings special promotions
- Increase contributions: Review your current savings rate and consider bumping it up
- Ask for gift contributions: Share your child’s 529 account information with family members who might want to contribute
- Check for state benefits: Research whether your state offers tax deductions or credits for 529 contributions
- Attend a workshop: Many financial institutions host free educational sessions on 529 Day
Common Questions About 529 Plans
Many families have questions about these plans:
What if my child doesn’t go to college? You can change the beneficiary to another family member, use it yourself, or withdraw the money (though taxes and a 10% penalty apply to earnings for non-qualified withdrawals).
Can I use 529 funds for any school? Funds can be used at eligible institutions, which include most accredited colleges, universities, trade schools, and now even some international schools.
How much should I save? “The right amount varies by family,” explains Lerner. “Some aim to cover all costs, while others save for a portion and plan to combine with financial aid and other resources.”
Getting Started Is Simple
Opening a 529 plan typically takes just a few steps:
- Research plans in your state
- Complete an online application
- Select your investment options
- Set up automatic contributions
Many plans let you start with as little as $25, making them accessible for most families.
Have you started saving for your child’s education yet? 529 Day serves as the perfect reminder that small steps today may help create more education options in the future.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.