529 College Savings Calculator
Calculate 529 plan growth and college funding gap
Results
529 College Savings vs Target
What is a 529 College Savings Plan?
A 529 plan is a tax-advantaged savings plan designed specifically for education expenses. Named after Section 529 of the Internal Revenue Code, these plans allow contributions to grow tax-free, and withdrawals for qualified education expenses are tax-free at the federal level. Most states also offer additional tax benefits.
529 plans are one of the best ways to save for college because of their tax advantages and flexibility. You can use funds for tuition, fees, books, supplies, and room and board at eligible educational institutions. Starting early maximizes the power of compound interest and helps you reach your college savings goals. See how compound interest works with our Compound Interest Calculator to understand the growth potential.
How to Use This Calculator
Enter your current 529 plan balance, monthly contribution amount, child's current age, college start age, expected annual return, and estimated total college cost. The calculator shows your projected savings at college start, total contributions, investment growth, and whether you'll have a surplus or shortfall.
Use the chart to visualize how your savings grow compared to the college cost target. Adjust your monthly contribution amount to see how it affects your ability to meet college funding goals.
Formula Explained
The 529 savings calculation uses compound interest:
Where:
- PV = Present Value (current 529 balance)
- PMT = Monthly contribution
- r = Monthly return rate (annual rate / 12)
- n = Number of months until college
The calculator compares projected savings to estimated college costs to show if you're on track.
Source: IRS Publication 970 - Tax Benefits for Education and College Board - Trends in College Pricing
When to Use This Calculator
Use this calculator when planning for your child's education, determining how much to contribute to a 529 plan, or evaluating if you're on track to meet college funding goals. It's ideal for parents, grandparents, or anyone saving for education expenses. For other savings goals, see our Savings Account Growth Calculator to compare different savings options.
Financial advisors use 529 calculators to help families understand how much to save, the impact of starting early, and whether they're on track to meet college funding goals. It's also useful for comparing different contribution strategies.
Tips for Best Results
- Start early: The earlier you start saving, the more time compound interest has to work. Starting when your child is born vs. age 10 can mean tens of thousands more in savings.
- Contribute regularly: Set up automatic monthly contributions to build savings consistently. Even small monthly amounts add up significantly over time.
- Use age-based portfolios: Most 529 plans offer age-based investment options that automatically adjust risk as your child approaches college age.
- Research state benefits: Many states offer tax deductions or credits for 529 contributions. Check your state's benefits, but you can use any state's plan.
- Account for inflation: College costs typically increase 3-5% annually. Use current costs but understand they'll likely be higher when your child attends.
- Compare investment options: Use our Investment Growth Calculator to see how different return rates affect your college savings.
Frequently Asked Questions
What is a 529 plan?
A 529 plan is a tax-advantaged savings plan designed to help families save for education expenses. Contributions grow tax-free, and withdrawals for qualified education expenses (tuition, fees, room, board, books) are tax-free at the federal level. Most states also offer tax benefits.
How much should I save for college?
College costs vary significantly. Public in-state colleges average $25,000-30,000 per year, while private colleges average $50,000+ per year. Use this calculator to see if you're on track based on your child's age and expected college costs. Start saving early to maximize growth.
What are qualified education expenses?
Qualified expenses include tuition, fees, books, supplies, equipment, and room and board (if enrolled at least half-time). Computers and internet access also qualify. Non-qualified withdrawals are subject to income tax and a 10% penalty on earnings.
Can I use a 529 plan for K-12 education?
Yes, since 2018, up to $10,000 per year per beneficiary can be used for K-12 tuition expenses. However, state tax treatment may vary. Check your state's rules before using 529 funds for K-12.
What happens if my child doesn't go to college?
You can change the beneficiary to another family member, use funds for graduate school, or withdraw the money (subject to taxes and penalties on earnings). You can also use up to $10,000 for student loan repayment. The account owner maintains control.
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