529 Plan College Savings Calculator
Estimate future college costs, project your 529 plan balance, and see how much you need to save each month to reach your education goal.
Tuition, fees, room & board for one year today.
E.g., yearly gifts from family.
Target coverage of total college cost
Choose what share of projected costs you want the 529 to cover (e.g., 75% if you expect scholarships or cash flow to cover the rest).
Results
Sum of all years of college at future prices.
Based on your coverage percentage.
Assumes contributions continue until college start.
How this 529 plan college savings calculator works
This tool estimates how much college will cost in the future, projects how your 529 plan could grow over time, and compares that to your goal. It uses standard compound interest and inflation math similar to what financial planners and major brokerages use.
1. Projecting future college costs
First, we estimate the cost of one year of college in today’s dollars and then grow it by an assumed college cost inflation rate until your child starts school.
Future annual cost in year t:
\( \text{Cost}_t = \text{Cost}_0 \times (1 + i)^{t} \)
where:
- \(\text{Cost}_0\) = current annual cost (today’s dollars)
- \(i\) = annual college cost inflation rate
- \(t\) = years from today until that college year
We repeat this for each year of college (e.g., 4 years) and sum them to get the total projected college cost.
2. Projecting 529 plan growth
Your 529 balance is grown using an expected annual investment return minus any annual fee or expense ratio. We also add your ongoing contributions.
We convert the net annual return to a monthly rate:
Net annual return:
\( r_{\text{net}} = r_{\text{gross}} - f \)
Approximate monthly return:
\( r_{\text{month}} = \dfrac{r_{\text{net}}}{12} \)
Then we simulate month by month until college start, adding your monthly contributions and optional annual lump-sum contributions, and compounding at the monthly rate.
3. Coverage target and required monthly savings
You can choose what percentage of total projected costs you want the 529 to cover (for example, 75% if you expect scholarships or cash flow to cover the rest).
Target amount:
\( \text{Target} = \text{Total College Cost} \times \text{Coverage \%} \)
To estimate the monthly contribution needed to hit that target, we treat your savings as a future value of an annuity plus your current balance:
Future value of monthly contributions:
\( FV_{\text{contrib}} = PMT \times \dfrac{(1 + r_m)^{n} - 1}{r_m} \)
Future value of current balance:
\( FV_{\text{current}} = PV \times (1 + r_m)^{n} \)
Solve for required monthly contribution:
\( PMT = \dfrac{\text{Target} - FV_{\text{current}}}{\dfrac{(1 + r_m)^{n} - 1}{r_m}} \)
where:
- \(PMT\) = required monthly contribution
- \(r_m\) = monthly net return
- \(n\) = number of months until college start
- \(PV\) = current 529 balance
Key assumptions and limitations
- The calculator assumes constant annual inflation and investment returns, which is not how markets behave in reality.
- It does not model taxes on non-qualified withdrawals, state tax deductions, or contribution limits.
- It assumes contributions continue at the same level until the child starts college.
- It does not model withdrawals during the college years; it focuses on the balance at college start.
Use the results as a planning guide and revisit your assumptions regularly as markets, college pricing, and your personal situation change.
What is a 529 plan?
A 529 plan is a tax-advantaged savings plan sponsored by states, state agencies, or educational institutions. It is designed to encourage saving for future education costs. Key features include:
- Tax-deferred growth: Investments grow without current-year federal income tax.
- Tax-free withdrawals for qualified expenses: Tuition, fees, books, and often room and board.
- High contribution limits: Often well above annual IRA or 401(k) limits.
- Flexible beneficiaries: You can usually change the beneficiary to another qualifying family member.
Rules vary by state and plan, and tax treatment can change. Always check your specific plan documents and consult a qualified tax or financial professional for personalized advice.
Tips for using this calculator effectively
- Run optimistic and conservative scenarios by adjusting return and inflation assumptions.
- Test different coverage percentages (e.g., 50%, 75%, 100%) to see how monthly savings change.
- Update the calculator annually as your child gets older and your 529 balance changes.
- Coordinate 529 savings with other goals like retirement to avoid overextending your budget.
This calculator is for educational purposes only and does not provide investment, tax, or legal advice. Always review your situation with a qualified professional before making financial decisions.