What is a 529 plan and how does it work?

A 529 plan is a tax-advantaged education savings account. Contributions grow tax-free and withdrawals for qualified expenses (tuition, room and board, books) are tax-free federally. Many states offer additional deductions for contributions.

How much should I save for college per month?

For a newborn targeting a public in-state university, $300–$500/mo at 6% return covers 70–100% of projected costs. For private university, plan $700–$1,000/mo. Starting earlier dramatically reduces required monthly savings.

How is college savings handled in a divorce?

529 accounts are marital assets subject to division. Divorce agreements often specify how each parent must contribute to college costs. The account owner retains control but may be bound by court orders on fund usage.

What happens to a 529 plan if my child doesn't go to college?

Options include changing the beneficiary, using funds for K-12 or trade school, rolling up to $35,000 into a Roth IRA (new 2024 rule), or withdrawing with earnings subject to tax plus 10% penalty. Principal is always penalty-free.

How fast is college tuition rising?

Published tuition has risen ~4–5%/yr at public universities and ~3–4% at private over 20 years. At 4% annual inflation, today's $112,000 four-year public cost becomes ~$185,000–$200,000 for a child born today.

College Savings Calculator

Project how much college will cost when your child enrolls and calculate exactly how much you need to save each month in a 529 plan.

All calculations are private — nothing leaves your browser

Child's Current Age

yrs

Target School Type

Already Saved (529 Balance)

Monthly Contribution

Expected Annual Return

529 plans avg ~6–7% historically

529 Plan Projection

$99,516

Future 4-yr Cost$201,706

Coverage49%

Funding Gap$102,190

Years to Save15 yrs

529 plan earnings grow tax-free and withdrawals for qualified education expenses are also tax-free. Many states offer additional deductions for contributions.

Advanced Calculator

Growth projection chart with contributions vs earnings, school type cost comparison across 5 tiers.

+ Open Advanced Calculator

Child's Current Age

yrs

Current Savings

Monthly Contribution

Expected Return Rate

Tuition Inflation

Years of College

yrs

529 Balance at Age 18

$120,774

Years to Grow13 years

Total Contributed$72,400

Investment Earnings$48,374

Year 1 (age 6)$15,500

Year 2 (age 7)$21,385

Year 3 (age 8)$27,682

Year 4 (age 9)$34,420

Year 5 (age 10)$41,629

Year 6 (age 11)$49,343

Year 7 (age 12)$57,597

Year 8 (age 13)$66,429

Year 9 (age 14)$75,879

Year 10 (age 15)$85,990

Year 11 (age 16)$96,810

Year 12 (age 17)$108,386

Year 13 (age 18)$120,774

ContributionsEarnings

Professional Simulator

Full 529 analysis with state deductions, financial aid impact, Roth IRA alternative strategy, and merit scholarship probability modeling.

+ Open Professional Simulator

Child's Age

yrs

Annual 529 Contribution

Current 529 Balance

Expected Return

Your State

Gross Household Income

529 + State Tax Advantage

$144,942 at age 18

Annual State Tax Savings$411

Total State Savings$5,343

State Deduction Limit$10,000/yr

State Tax Rate6.9%

NY: $10,000 deduction. Contributing the full deductible amount saves $411/yr on state taxes.

How the College Savings Calculator Works

College costs have risen at approximately 4–5% per year over the past two decades — roughly double general inflation. This calculator helps you project how much college will cost when your child enrolls, how much you need to save each month to fully fund it, and how your 529 plan will grow under different contribution scenarios.

The 529 Plan tab projects how much your current savings and monthly contributions will grow by college enrollment time. The Monthly Savings Goal tab works backward: given your target school type and inflation assumptions, it tells you exactly how much you need to save each month starting today. The Cost Projection tab shows how today's college costs inflate over 5, 10, 15, and 18 years.

All projections use compound interest. Even modest monthly contributions started early have an outsized effect due to the power of compounding over 15–18 years.

529 Plan Growth Formula

Future Value of Current Savings: FV = PV × (1 + r/12)^(years × 12) Future Value of Monthly Contributions: FV = PMT × [(1 + r/12)^n − 1] / (r/12) Total Projected Savings = FV(current) + FV(contributions) Future College Cost = Today's Annual Cost × (1 + inflation)^years × 4 Monthly Savings Needed: PMT = (Target − FV(current)) × (r/12) / [(1 + r/12)^n − 1]

Current 4-year totals (tuition + fees + room + board, 2024–25): Community college ~$48,000; Public in-state ~$112,000; Public out-of-state ~$184,000; Private ~$248,000; Top private ~$328,000. At 4% annual inflation, these figures double every ~18 years.

Example Calculation

Example: Age 5 child, targeting public in-state university

Current 4-year public in-state cost$112,000

Years until college13 years

Tuition inflation (4%)×1.665

Projected 4-year cost$186,500

Current 529 balance$10,000

Monthly savings needed (6% return)$640/mo

If started at birth$430/mo

Starting 5 years later (at age 5 vs birth) increases the required monthly savings by about $210/mo — or $2,500/yr — due to lost compounding time. This illustrates why opening a 529 plan as early as possible makes a significant financial difference.

Frequently Asked Questions

A 529 plan is a tax-advantaged savings account specifically designed for education expenses. Contributions are made with after-tax dollars, but earnings grow tax-free, and withdrawals for qualified education expenses (tuition, room and board, books, etc.) are also tax-free at the federal level. Many states offer additional state income tax deductions for contributions. You can invest in a variety of funds within the plan, and the account can be used at any accredited institution nationwide. Annual contribution limits are high ($18,000/yr per donor under gift tax exclusion), with a special 5-year front-loading option.

It depends on your target school type, child's age, and investment return assumptions. As a general rule for a newborn targeting a public in-state university, saving $300–$500/mo from birth at a 6% return rate should cover 70–100% of projected costs. For a private university, plan for $700–$1,000/mo. For older children, the monthly amount increases significantly — starting at age 10 instead of birth can triple the required monthly savings. Use this calculator to model your specific situation.

529 plan accounts are treated as assets in divorce proceedings and may be subject to division. Courts often consider who owns the account, who contributed, and what the child's needs are. Some divorce agreements include provisions requiring both parents to contribute to college costs — either through an agreed split or as a percentage of income. Many states allow courts to order college cost contributions. The account owner retains control, but the agreement may specify how funds must be used. Changing the beneficiary to another family member is possible if college isn't needed.

If your child doesn't attend college, you have several options: (1) Change the beneficiary to another family member (sibling, cousin, yourself) at no penalty; (2) Use the funds for K-12 tuition (up to $10,000/yr), trade school, or apprenticeship programs; (3) Starting in 2024, unused 529 funds can be rolled over to a Roth IRA for the beneficiary (lifetime limit $35,000, subject to annual contribution limits); (4) Withdraw the funds for non-qualified expenses — earnings will be subject to income tax plus a 10% penalty, but the principal is always penalty-free.

Over the past 20 years, published college tuition has risen at approximately 4–5% per year at public universities and 3–4% at private universities. However, the "net price" (after scholarships and financial aid) has risen more slowly — around 2–3% annually — because financial aid has grown alongside tuition. For planning purposes, using 4% annual tuition inflation is a reasonable conservative assumption. At 4% inflation, a $28,000/yr in-state college costing $112,000 for four years today will cost approximately $185,000–$200,000 for a child born today.