Legislature approves hiking 529 plan account limit to $500,000

Cropped Photo: 401(K) 2012 / Flickr / CC BY-SA 2.0

LANSING, Mich. (AP) – More money could be set aside in Michigan’s tax-free college savings accounts under legislation going to Gov. Rick Snyder.

The current maximum account balance for education accounts naming any individual in the Michigan Education Savings Program is $235,000. The limit would rise to $500,000 under the bill approved unanimously Wednesday by the Senate.

The plans, which offer tax advantages, are known as 529 accounts.

The legislation is part of a package to let residents with disabilities open savings accounts to pay for long-term needs. A new federal law lets states establish Achieving a Better Life Experience, or ABLE, accounts.

The law requires the maximum allowed balance in an ABLE account to be the same as a state’s college savings plan limit.

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