College Savings (529) Calculator

Two moving targets, not one

College savings is genuinely a two-variable problem: how much your investments will grow to by the time college starts, and how much college will actually cost by then — and both numbers are moving, in opposite directions from a saver’s perspective, over the same span of years. This calculator projects both simultaneously — your contributions compounding forward at an assumed return, and today’s college cost compounding forward at its own (typically higher) inflation rate — so the comparison at the end reflects both sides of the problem rather than comparing today’s savings target against today’s tuition price, which understates the real gap.

Why college costs get their own inflation rate, not the general one

Higher education costs have historically risen faster than the broader Consumer Price Index for extended stretches, which is why this calculator asks for a separate college-cost inflation assumption rather than reusing a general inflation figure. The drivers behind that historical gap — reduced per-student state funding at public institutions in many states, rising administrative and facility costs, and other structural factors — aren’t guaranteed to persist at the same rate going forward, but assuming college costs will simply track general inflation has proven optimistic across recent decades. Using a somewhat higher, more conservative rate here is a reasonable planning default even if the actual future rate turns out lower.

The two levers you actually control

Of everything in this calculator, only two inputs are genuinely yours to adjust in the near term: the monthly contribution and, to a lesser extent, the years-until-college figure if you’re planning well ahead of an actual birth or early childhood. Expected investment return and college cost inflation are assumptions about the world, not decisions — use reasonably conservative figures for both rather than optimistic ones, since overshooting a savings goal is a far better outcome than falling meaningfully short after years of “on track” projections built on optimistic assumptions.

What a 529 plan adds beyond the investment math itself

This calculator’s growth projection works the same way regardless of what account holds the money, but a 529 plan specifically adds two tax advantages worth understanding before choosing where to save: investment growth is federally tax-free when used for qualified education expenses (meaningfully different from a taxable brokerage account, where growth is taxed along the way), and many states offer their own additional deduction or credit for contributions to that state’s plan. The specific state tax benefit — if any — varies considerably, and some states allow a deduction for contributions to any state’s plan while others only reward contributions to their own; check your specific state’s rules rather than assuming a benefit that may not apply to you.

Flexibility if plans change

A common hesitation with 529 plans is fear of “wasting” the money if a child doesn’t attend a traditional four-year college. In practice, 529 rules have broadened over time — funds can generally cover a range of qualified expenses including many vocational and trade programs, can be transferred to a sibling or other qualifying family member without penalty, and under specific conditions can be rolled into a Roth IRA for the beneficiary up to defined lifetime limits. Rules and limits are subject to change, so verify current guidance before counting on a specific fallback use case. See the cost of raising a child calculator for the broader multi-year household budget this savings goal sits inside, and the compound interest and savings goal calculators for the same growth math applied to other goals.