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.

What is the 529 College Savings Calculator?

Project how much a 529 college savings plan will grow with monthly contributions and investment returns, and compare it to projected college costs inflated to your child's enrollment year. Shows future balance, total contributions, growth, and any funding gap. It runs free in your browser on Gera Tools, with nothing uploaded.

529 College Savings Calculator

Name: 529 College Savings Calculator
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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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.

Illustrative worked example

Start with $10,000, add $300 a month, assume a 6% 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 current annual cost inflated at 5% over 15 years reaches about $51,973 per year, or about $207,893 for four years. The funding gap is about $96,106, so the plan covers roughly 54% of projected cost. These are illustrative figures using the assumptions you input; your results will differ based on your actual numbers.

Why the enrollment-year inflation matters so much

College costs have historically risen faster than general consumer inflation, which is why the calculator defaults to 5% and why starting early matters so much. At 5% inflation, a $25,000 per-year cost today becomes roughly $52,000 in 15 years and about $64,000 in 18 years. Over four years of college, the difference between starting to save when a child is born versus starting at age 5 translates to tens of thousands of dollars in projected gap — even at the same monthly contribution amount.

Adjusting your return assumption over time

Many 529 plans use age-based portfolios that automatically shift from stocks toward bonds as enrollment approaches. A reasonable way to model this is to use a higher return (perhaps 6-7%) if enrollment is more than 10 years away and a more conservative figure (3-5%) if enrollment is within 5 years. Run the calculator twice with different returns to see the range.

529 qualified expenses and key tax rules

Earnings grow federal-tax-free when used for qualified expenses, which include tuition, mandatory fees, books, and room and board at eligible institutions. K-12 tuition up to $10,000 per year per student is also qualified. Non-qualified withdrawals owe income tax plus a 10% federal penalty on the earnings portion. Unused balances can be rolled to a Roth IRA for the beneficiary starting in 2024 (subject to Roth IRA annual limits and a 15-year account age requirement under SECURE 2.0 rules).

Notes

Estimate only, not financial advice. Investment returns are not guaranteed and vary year to year. Verify current plan rules at irs.gov and with your state 529 program.