529 College Savings Calculator

Disclaimer: This calculator is provided for educational and estimation purposes only and does not constitute formal financial advice.

Two growth curves, one finish line

A 529 projection is really two races running at once. The plan balance grows from what you have already saved plus monthly contributions, compounding at the portfolio’s return. The cost of college grows too, from today’s figure at the rate college inflation has historically run. The finish line is the September the child turns eighteen — and the question is which curve is higher when both arrive.

The calculator above sets up both curves from seven inputs: the child’s age, the current balance, the monthly contribution, the assumed return, one year of college in today’s dollars, the annual growth rate of college costs, and your state income-tax rate if contributions are deductible.

The balance curve

With a current balance P, monthly contribution PMT, and monthly rate i, the balance B_n after n months of saving is the standard future-value accumulation:

The table below is the actual year-by-year projection from the calculator’s defaults — a $10,000 balance, $300 a month at 6%:

Notice what happens in the second half of the decade: the balance grows by $32,938 in years 5–10 while contributions add only $18,000, so interest is doing nearly half the work by the end. The curve is not linear — it is bending upward, and the bend is the compounding that makes early money worth more than late money of the same size.

The cost curve

College costs are projected the same way, but with no monthly contribution — the bill grows by pure compounding from today’s figure:

At the default 5% cost growth, one year of college priced at $30,000 today costs $48,867 when an 8-year-old enrolls, and the four-year bill is $195,467. This is the number most people underestimate. Their mental model is today’s price; the plan actually has to meet a price a decade out.

The gap, and what closes it

The default projection leaves the balance at $67,358 against a $195,467 bill — 34% covered, with a $128,109 gap. Closing that gap by day one of college requires a monthly deposit of $1,082, which is $782 a month more than the current $300. Those are the three levers in one sentence: save more, accept a lower coverage share, or have started earlier.

The power of starting earlier shows up cleanly when you change only the age. Saving the same $300 a month at 6%, a 5-year-old reaches $92,407 by college and covers 41% of a bill that has grown to $226,278; a 12-year-old reaches $40,243 and covers 25% of a $160,811 bill. The older child’s absolute gap is smaller — $120,568 against $133,871 — but so is the time left to close it: $1,695 a month versus $869. Each year of delay raises the monthly price of the same outcome, and the increase compounds as the runway shortens.

Why the plan, not a taxable account

The projection above would look identical for a plain brokerage account — the math does not know what kind of account the money is in. What the 529 adds is tax treatment: earnings grow federal-tax-free, and withdrawals used for qualified education expenses come out federal-tax-free. That is the entire difference, and it is worth real money on a two-decade compounding curve, because it means the return you assume is the portfolio’s full return rather than the return after capital-gains and dividend taxes.

The state deduction is a separate, smaller benefit layered on top. At a 5% state tax rate, the default $300 monthly contribution saves $180 a year in state income tax — modest against the balance, but it is free money every year, and states that offer it usually cap the deduction at a few thousand dollars of contributions a year, so the calculator’s figure assumes your contributions stay within the cap. To see how the balance itself grows, the compound interest calculator runs the same accumulation on any principal and contribution you choose.

When the plan overshoots

Raise the starting balance enough and the projection inverts: the balance crosses the cost line before college starts, coverage hits 100%, and the monthly deposit required to cover the bill drops to zero. The chart shows the crossing point — the year the balance line meets the cost line — and the answer to “when did we save enough” is the year the gap turns negative. The only decision left at that point is what to do with surplus growth, and there are worse problems to have.