Before the ball drops: Boost your 529 savings before year-end

As the year winds down, there’s still plenty of time to boost your CollegeBound 529 plan. Whether you’re adding another contribution, taking advantage of state tax benefits, or encouraging family to contribute through Ugift®¹, you can start the new year with the momentum to help your child achieve their education goals.

Don’t leave tax benefits on the table

Many states offer tax deductions or credits for 529 plan contributions², and to capture 2025 benefits, contributions must be made before December 31. Year-end is also a good time to evaluate your state’s maximum deductible amount. Contribution limits vary widely by state, with some plans allowing lifetime contributions of $500,000 or more per beneficiary.

You can also make it a family tradition: contribute before the ball drops, then raise a glass knowing you’ve made a great investment in your child.

Make it a family affair with Ugift®

CollegeBound 529 makes it easy for loved ones to contribute to a child’s education. Through Ugift®, friends and family can make secure, electronic contributions directly to your 529 account. This means no checks, no fees, and no guesswork.

It’s a great solution for friends, grandparents, or other relatives. They can contribute any amount and know their dollars are helping build a lasting foundation for your child’s future.

Timing matters — contributions made before December 31 can count toward the 2025 annual gift tax exclusion, which has risen to $19,000 per person (or $38,000 for married couples filing jointly) per recipient. And because 529 plans now allow unused funds to be rolled into a Roth IRA in the beneficiary’s name (subject to limits and rules under the SECURE 2.0 Act), contributors can feel confident that their gifts won’t go to waste if the child doesn’t need every dollar for education.

Max out your contribution potential

For families in a position to make larger contributions, the end of the year is an ideal time to review how much you’ve saved and how much more you can add before hitting annual or lifetime limits.

As mentioned, the 2025 gift tax exclusion allows up to $19,000 per individual or $38,000 per couple to be contributed to a 529 plan without triggering federal gift taxes. Families who want to make a larger upfront contribution can also take advantage of the five-year election (or “superfunding”) rule, which lets you contribute up to five years’ worth of gifts at once. That equates to $95,000 for individuals or $190,000 for married couples.

Superfunding gives your money more potential time to grow tax-free, with the benefit of removing assets from your taxable estate. It’s a potentially optimal strategy for grandparents or parents with the means to front-load their child’s education savings. Just be sure to consult a financial professional if you’re making other large gifts this year or want to coordinate contributions between multiple beneficiaries.

Bonus tip: Check your investment mix and progress

The end of the year is also a good time to review your CollegeBound 529 investment strategy and ensure it aligns with your goals. CollegeBound 529 offers Year of Enrollment Portfolios, which automatically adjust their mix of investments as your child gets closer to college. But if your family’s circumstances or timeline have changed, you may want to review your allocations with a financial professional.

While you’re at it, you can also use this time to check your balance and set a contribution schedule for next year. Keep in mind that monthly or quarterly automated deposits make it easier to stay on track without needing to think about it.

Whether you’re making a final contribution, sending a Ugift® link to loved ones, or planning a larger strategy for the new year, your actions today can have a lasting effect on your child’s tomorrow.