529 Calculator
Plan college savings with a 529 plan: project the future cost of college, how much your savings will grow, the gap, and the monthly amount needed to reach your goal.
Results
| Item | Value |
|---|
Savings by year
| Child’s age | Contributed | Balance |
|---|
Quick Answer
Future college cost = today's cost × (1 + cost increase)^years. For a 5-year-old, $25,000 a year growing 4% a year adds up to about $176,767 for 4 years starting at 18. With $10,000 saved and $250 a month at 6%, the 529 could reach about $80,634. Reaching the full goal would take about $658 a month.
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Table of Contents
- 529 Calculator
- Quick Answer
- Related Calculators
- How This 529 Calculator Works
- How to Use the 529 Calculator
- Core Formulas
- Key Terms
- Worked Example
- Real-Life Examples
- 529 Plan vs Regular Savings
- Monthly Savings for a $100,000 Goal
- What Changes the Result
- Common Mistakes to Avoid
- Frequently Asked Questions
- References & Sources
How This 529 Calculator Works
Enter your child's age, when college starts, how many years it lasts and the yearly cost today. Add your expected yearly cost increase, current 529 savings, monthly contribution and expected return. The calculator grows the cost of each college year to its future value, grows your savings month by month to the start of college, and shows the shortfall or surplus and the monthly amount that would reach your goal.
Quick explanation: college costs and savings both grow over time.
- Start early: more years of growth means smaller monthly amounts.
- Cost increase: raises the target each year.
- Goal share: you can aim to cover part of the cost.
How to Use the 529 Calculator
- Enter your child's age and when college starts.
- Enter years of college and the yearly cost today.
- Enter the cost increase and expected return.
- Enter current savings and the monthly contribution.
- Press Calculate and read the gap and monthly amount needed.
Core Formulas
- Future cost of year k: today's cost × (1 + i)n + k
- Savings at college start: S × (1 + r)m + P × ((1 + r)m − 1) ÷ r
- Monthly needed: (goal − S × (1 + r)m) × r ÷ ((1 + r)m − 1)
Here i is the yearly cost increase, n is years until college, r is the monthly return and m is the number of months until college.
Key Terms
- 529 plan: a tax-advantaged education savings plan under Section 529 of the tax code.
- Education savings plan: a 529 where savings are invested and grow with the market.
- Prepaid tuition plan: a 529 that lets you pay for future tuition at today's prices at certain schools.
- Qualified expenses: education costs that can be paid from a 529 with tax benefits.
- Beneficiary: the student the 529 is saving for.
Worked Example
Using the default numbers:
- Years until college: 18 − 5 = 13
- Projected cost of 4 years: $176,767, and projected savings: $80,634
- Shortfall: $96,133, so you would need about $658 a month instead of $250
Real-Life Examples
- Newborn plan: starting at age 0 lowers the monthly amount to about $479.
- Half the cost: set the share to 50% if you plan to cover the rest with aid or work.
- Late start: at age 12, the monthly amount needed jumps to about $1,389.
- Grandparents: see how a lump sum today changes the plan.
529 Plan vs Regular Savings
- 529 plan: a tax-advantaged plan for education, sponsored by states or schools.
- Regular savings or brokerage: more flexible use, but usually without the 529 tax benefits.
- Prepaid tuition plans: another kind of 529 that locks in tuition at certain schools.
Monthly Savings for a $100,000 Goal
Starting from $0 savings.
| Years to save | 4% return | 6% return | 8% return |
|---|---|---|---|
| 5 | $1,508 | $1,433 | $1,361 |
| 8 | $886 | $814 | $747 |
| 10 | $679 | $610 | $547 |
| 13 | $490 | $425 | $366 |
| 15 | $406 | $344 | $289 |
| 18 | $317 | $258 | $208 |
What Changes the Result
- Time: each year of delay means bigger contributions later.
- Returns: plans often shift to safer investments as college nears.
- School type: public, private and in-state costs differ a lot.
- Aid and scholarships: may lower what you need to save.
Common Mistakes to Avoid
- Using today's cost as the goal. College costs usually rise over time.
- Assuming high returns. Use a cautious rate, especially near college age.
- Waiting to start. Small early amounts can beat large late ones.
- Ignoring state benefits. Some states offer tax breaks for contributions.
- Forgetting non-tuition costs. Housing, food and books add up.
Frequently Asked Questions
A tax-advantaged savings plan for education, sponsored by states, state agencies or schools under Section 529 of the tax code.
It depends on the school and your goal. Enter your numbers to see the monthly amount.
A cautious estimate. Many people use lower returns as college gets closer.
It varies by year and school. Enter your own assumption for the yearly increase.
Yes. Set the share to cover below 100%.
Rules for other uses differ, so check your plan and IRS rules.
No. Lower the share or the cost to reflect aid you expect.
Investor.gov notes the SEC does not regulate or oversee 529 plans. They are run by states and schools.
A lump sum has more time to grow, which lowers the monthly amount needed.
Prepaid tuition plans and education savings plans.
In real life, money not yet spent can keep growing. This calculator stops at the start of college to be cautious.
No. It is a planning estimate.
References & Sources
| Source | Used For | Link |
|---|---|---|
| Investor.gov (SEC), 529 Plans | What 529 plans are and the two types. | https://www.investor.gov/introduction-investing/investing-basics/glossary/529-plans |
| Wikipedia, 529 plan | How 529 plans work. | https://en.wikipedia.org/wiki/529_plan |