How is the future 529 balance calculated?

The tool compounds your current balance and monthly contributions monthly at your assumed return. With a $10,000 balance, $300 a month, a 6% return over 15 years, the future balance is about $111,787 — roughly $64,000 contributed plus $47,787 of growth.

How does it project future college costs?

It inflates today's annual cost to the enrollment year and multiplies by four years of college. A $25,000 current annual cost inflated at 5% over 15 years reaches about $51,973 per year, or roughly $207,893 for four years.

What return and inflation rates should I use?

A diversified 529 portfolio is often modeled at 5% to 7% returns, and college sticker prices have historically risen around 5% a year. The tool defaults to 5% inflation; lower your return assumption as the enrollment year approaches and the plan shifts to bonds.

Are 529 withdrawals taxed?

529 earnings grow federal-tax-free and are not taxed when used for qualified education expenses such as tuition, fees, books, and room and board. Non-qualified withdrawals owe income tax plus a 10% penalty on the earnings portion.

529 College Savings Calculator

A 529 plan lets you save for college with tax-free growth on qualified withdrawals. This calculator compounds your current balance and monthly contributions toward an enrollment year, inflates the projected four-year college cost, and shows whether you are on track or facing a funding gap.

How it works

Savings are compounded monthly. The future value combines your starting balance and your stream of monthly contributions:

FV(balance)       = balance * (1 + r/12)^n
FV(contributions) = PMT * (((1 + r/12)^n − 1) / (r/12))
projectedCost     = currentAnnualCost * (1 + inflation)^years * 4

Here r is your annual return as a decimal and n is years times 12. When the return is zero the contribution term reduces to PMT times n. The four-year cost is the current annual cost grown at the inflation rate to the enrollment year, multiplied by four.

Example

Start with 10,000 dollars, add 300 dollars a month, assume a 6 percent return over 15 years (180 months):

FV(balance)       = 10,000 * (1.005)^180 ≈ 24,541
FV(contributions) = 300 * ((1.005^180 − 1) / 0.005) ≈ 87,246
future balance    ≈ 111,787   (contributed 64,000, growth 47,787)

A 25,000 dollar current annual cost inflated at 5 percent over 15 years reaches about 51,973 dollars per year, or about 207,893 dollars for four years. The funding gap is about 96,106 dollars, so the plan covers roughly 54 percent of projected cost.

Notes

Estimate only, not financial advice. Investment returns are not guaranteed and vary year to year, and many 529 plans shift toward bonds as enrollment nears, lowering the expected return. Earnings used for qualified education expenses are federal-tax-free; non-qualified withdrawals owe income tax plus a 10% penalty on earnings. Verify plan rules at irs.gov and with your state 529 program.

529 College Savings Calculator

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How it works

Example

Notes