529 Calculator: College Savings Plan Projection

How this 529 calculator works

Saving for college means winning a race between two compounding curves: your investment growth and the rising cost of tuition. This calculator models both. It grows your current 529 balance and your monthly contributions to the year your child starts school, then compares that projected balance to what a degree will actually cost by then.

Your current savings compound at your expected annual return, and each monthly contribution is treated as an ordinary annuity that grows until matriculation. On the cost side, today's annual price is inflated separately for each future college year — so a four-year degree starting fifteen years from now reflects fifteen-plus years of education inflation, not one.

The projected balance uses the future-value formulas for a lump sum plus a stream of monthly contributions. With a current balance P, a monthly contribution C, a monthly return i (annual return ÷ 12), and n months until college:

FV = P(1 + i)ⁿ + C · ((1 + i)ⁿ − 1) / i

Each future year of tuition is inflated from today's cost at your college-cost inflation rate g: a bill y years out equals today's cost × (1 + g)^y. The savings goal then discounts those future bills back to the start of college at your expected return, since the balance keeps earning while it's drawn down.

The savings goal, explained

You don't need the entire four-year cost saved on day one of college. The balance keeps earning during the college years while it's drawn down. So the calculator computes a goal at matriculation: the lump sum that, left invested at your expected return, exactly covers each year's bill as it comes due. The first year is paid immediately; later years are discounted back because that money keeps growing a little longer. This is why the goal is lower than the raw projected total cost.

Surplus, shortfall, and coverage

Comparing your projected balance to the goal gives three useful numbers. Coverage is the percentage of the goal your current plan is on track to meet. The surplus or shortfall is the dollar gap. And the monthly to fully fund figure solves the problem in reverse: holding your current balance fixed, what monthly contribution would land you exactly on the goal? If you're behind, that number is your target; if you're ahead, you have room to ease off or aim higher.

Why college cost inflation matters so much

General prices have grown around 2–3% a year, but published college costs have historically climbed closer to 5%. Over the long horizon of a young child's college fund, that gap dominates the result. A small change to the inflation assumption moves the goal substantially, which is why it's a separate input here rather than a hidden constant. If your child will attend an in-state public school, lower both the cost and possibly the inflation rate; for private colleges, raise them.

How plan fees eat into your balance

Every 529 charges an annual expense ratio — a percentage of your balance that covers the underlying funds and plan administration. It looks tiny, often between 0.1% and 1%, but it compounds against you for the entire time your money is invested. This calculator subtracts the expense ratio from your expected return to project the balance you'll actually have, and the "Lost to fees" line shows how many dollars the fee quietly removes over the full horizon. On a typical long-term plan, the gap between a 0.1% and a 0.9% expense ratio can run into the thousands. Direct-sold state plans and low-cost index options usually carry the lowest fees; advisor-sold plans tend to cost more.

A note on state tax benefits

Beyond federal tax-free growth, most states offer their own tax deduction or credit for 529 contributions — but the rules vary enormously. Some states give a generous deduction only if you use their plan; a handful (the "tax-parity" states) let you deduct contributions to any state's plan; and several states with no income tax offer no deduction at all. Because these rules change and differ by state, this calculator deliberately does not model a specific state's benefit — doing so accurately for all 50 states would be misleading to maintain. Check your own state's official 529 program and revenue department for the current deduction or credit before you choose a plan. The federal treatment in this tool applies everywhere; the state break is a bonus layered on top.

Putting it in context

A 529 is one piece of a household financial plan. Make sure college savings aren't crowding out retirement — you can borrow for college but not for retirement, so check your retirement calculator first. If grandparents or relatives plan to help, factor in gift-tax basics with the capital gains and investment guide. And if you'll still need loans to fill a gap, our student loan calculator shows what those payments would look like after graduation.

Sources & methodology

The tax treatment of 529 plans referenced here is based on federal guidance. State tax deductions and credits vary widely by state and plan — confirm yours with your state's official 529 program:

• IRS — Publication 970, Tax Benefits for Education (qualified expenses, tax-free growth, Qualified Tuition Programs)
• IRS — 529 plans: questions and answers
• State 529 tax benefits vary — verify with your own state's official 529 plan and revenue authority.
• Projection math uses the future-value formulas shown above; returns and college-cost inflation are user-set assumptions, not guarantees.

Changelog. June 2026 — added explicit growth/future-value formula, author attribution, and IRS source citations. June 2026 — initial publication.

Frequently asked questions