Three ways to give the gift of education

Three ways to give the gift of education
Key takeaways
Accelerated gifting

Making five years of gifting in a lump sum contribution can help maximize compounding and estate planning.

Automatic regular contributions

Take advantage of dollar-cost averaging and compounding to give the money time to grow and maximize savings.


Make it simple for friends and family — really anyone — to contribute to a child’s education with Ugift®.

December is known as giving season. Why not give the gift of education to a child or grandchild with a 529 college savings plan? There are three ways to help maximize your giving and 529 plan — accelerated gifting, automatic contributions, and Ugift®

Accelerated gifting

Accelerated gifting or “superfunding” is a special provision of 529 plans that allows a person to make five years of contributions (the current year plus four future years) in a single year. It’s up to $80,000 per person (five times the $16,000 annual gifting limit per beneficiary for 2022) or $160,000 for married couples filing jointly .Footnote 1 (The annual gift amount rises to $17,000 in 2023, so a person can contribute $85,000 and a married couple $170,000.) A person can gift to as many people as they want in a year, so you can superfund a 529 college savings plan for as many children as you want.

Accelerated gifting can be useful for those who want to reduce their taxable estate. For estate planning purposes, the Internal Revenue Service considers assets held in a 529 plan as a completed gift and treats them as the beneficiary’s assets, not the account owners.1
Accelerated gifting can be beneficial to a child too. A large one-time gift to a 529 plan can benefit from compounded growth, especially if it’s made when the child is born and has 18 years to grow. Consider this example. John used accelerated gifting to contribute the maximum allowable five-year gift of $80,000 to a 529 plan for his grandson. After 18 years and assuming a 5% annual rate of return, it could grow to more than $192,000. He also reduced his estate by $80,000. If his wife also makes an $80,000 one-time gift, the $160,000 could grow to more than $385,000. They reduce their estate by another $80,000 too.2

Make it automatic

If you want to contribute meaningfully to a child’s education but can’t make a large one-time gift, regular automatic contributions are another way to help maximize savings. A $200 monthly contribution, for example, can grow to more than $41,400 in 18 years.3

You get the benefit of compounding growth too. Automatic contributions also utilize dollar-cost averaging, so you purchase fewer shares when prices are high and more shares when prices are low. Plus, automatic contributions are a set-it-and-forget-it way to make regular contributions.

Learn more about automatic 529 plan contributions.

Anyone can make a gift contribution
If people are asking about gift ideas this holiday season, consider suggesting contributing to a 529 savings plan for a child. Friends, family members, employers, and anyone else who wants to can contribute to a CollegeBound 529 plan using Ugift®. For each beneficiary, 529 plan owners receive a unique Ugift® code. They can share this code with others who wish to contribute to the account at Ugift® has an easy solution for those who may be uncomfortable asking for a contribution. Polite requests can be made via Ugift’s email or with a Facebook or Twitter account.

Learn more about Ugift®.

Every contribution — large or small — counts
Every dollar saved today is a dollar plus interest a student or parent may not have to borrow tomorrow. Learn more about how to contribute to a child’s education with a 529 college savings plan.


  • 1

    The gift-tax exclusion applies, provided the 529 account owner makes no other gifts to the beneficiary during a five-year period. Contributions between $16,000 and $80,000 ($32,000 and $160,000 for married couples filing jointly) made in one year may be prorated over a five-year period without subjecting the donor(s) to federal gift tax or reducing his/her federal unified estate and gift tax credit. If an individual contributes less than the $80,000 maximum ($160,000 for married couples filing jointly), additional contributions may be made without subjecting the donor to federal gift tax up to a prorated level of $16,000 ($32,000 for married couples filing jointly) per year. Gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given beneficiary in the year of contribution. If the account owner dies before the end of the five-year period, a prorated portion of contributions between $16,000 and $80,000 ($32,000 and $160,000 for married couples filing jointly) made in one year may be included in his or her estate for estate tax purposes. Please consult your tax and/or legal advisor for further guidance.

  • 2

    Source: Invesco. For illustrative purposes only. This hypothetical illustration assumes an initial investment and a second investment up to the maximum before gift tax penalties apply and a 5% annual compounding rate of return. The illustration does not represent the performance of any specific investment and does not reflect any plan fees or sales charges that may apply. If such fees or sales charges had been taken into account, returns would be lower.

  • 3

    Assumes a 5% monthly compounded growth from the beneficiary’s birth until age 18. The hypothetical example is for illustrative purposes only and does not represent the performance of an actual account.

Related insights