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529 Plans vs. Coverdell ESA: Choosing What Is Right for You

By Adam Levy – Updated May 6, 2025 at 12:18PM

Key Points

  • 529 plans allow tax-free growth and withdrawals for education, plus a potential state tax deduction.
  • Coverdell ESAs offer wider investment options and expense eligibility, but have a $2,000/year limit.
  • 529 prepaid plans lock in tuition rates, which could be useful given rising college costs, but restrict usage.
Key findings are powered by ChatGPT and based solely off the content from this article. Findings are reviewed by our editorial team. The author and editors take ultimate responsibility for the content.

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