Match for Match: Get a 529 Plan Boost

Match for Match: Get a 529 Plan Boost

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You know about the possibility of getting a match for your 401(k) contributions, but did you know you can get a match for 529 Savings Plan contributions as well? Several state-run 529 programs offer a match. While you might not meet the eligibility requirements for these particular programs, you still might be able to get a match through similar programs.

While the cost of attending a four-year private college is enough to dash your hopes of financing your child’s education, a disciplined savings plan can help alleviate the financial burden. Financial experts say in addition to benefits such as tax-deferred growth, and federal income tax-free distributions, you may also be eligible to receive free money in the form of a match for your 529 Plan contribution.

Mark Kantrowitz, publisher of and, says matching grants have been around for about a decade, and are usually disbursed by state-sponsored 529 plans. Those applying for matching grants must be residents of the state, and must meet all income guidelines.

For example, Missouri offers a dollar-for-dollar match up to $500 per year for residents with an adjusted gross income of $74,999 or less. The most a beneficiary can earn is $2,500. Some states offer even more to those with lower incomes. In Arkansas, those who earn less than $30,000 can receive $2 for every $1- up to $500. Other states like Louisiana will match up to 14% of annual deposits, depending on income.

If you’re ineligible to receive a state-based 529 match, other options include rewards programs like Upromise, a national college savings rewards program that offers up to 25% back on qualified purchases. The program is free, and as you spend, you can have rewards rolled from your Upromise account over to your 529 plan.

“You don’t have to have all of college saved for to benefit from a 529 plan,” says Michael Fitzgerald, Iowa state treasurer and past chairman of the College Savings Plan Network. “Start with a year, or even a semester.”

Those looking to open a 529 plan should always start by researching what their home state has to offer, says Fitzgerald. Thirty-four states offer plans with tax incentives such as state income tax deductions in addition to the standard federal tax-free distribution. In Colorado, all annual contributions are deductible from state taxable income unless non-qualified withdrawals are made. In some states there is no minimum contribution; others can require as much as $1,000. Other factors to consider when selecting a plan are fees. Kantrowitz says ideally, fees should be less than 1%.

Joe Hurley, a  529 savings plan expert, suggests selecting an age-based option, which is more aggressive with stocks when the child is young, but becomes more conservative as he or she gets closer to college age. He says while there’s never a guarantee that money won’t be lost, this option can help protect money earned over the years. Kantrowitz says this option usually starts off with a portfolio made up of 80 % in stocks and ends with about 20%.