College Savings / 529 Calculator — Methodology

How This Calculator Works

This calculator projects your 529 plan balance at the time your child starts college, compares it to the inflation-adjusted total cost of the selected school type, and calculates the funding gap and the monthly contribution needed to reach your coverage goal. It says you are on track when the projected balance reaches that goal, and says “fully fund” only when the balance covers the whole projected cost.

Inputs and Assumptions

• Child's current age: Determines years until college (assumed start at age 18).
• School type: Public in-state, public out-of-state, private, or community college. Uses current-year base costs from College Board data.
• Years in college: 2 or 4 years (default 4), the two choices the calculator offers.
• Coverage goal: What percentage of total costs you want the 529 to cover (default 100%).
• Current 529 balance: Existing savings in the plan.
• Monthly contribution: Ongoing monthly additions.
• Investment return: Expected annual return on 529 investments (default 6%).
• College inflation rate: Annual increase in college costs (default 5%, historically higher than general inflation).

Formula

// Years until college
yearsUntilCollege = 18 - childAge

// Monthly compounding: the annual return entered, divided by 12
months = yearsUntilCollege × 12
monthlyReturn = investmentReturn / 12

// Future cost of college (each year inflated separately)
For year = 0 to yearsInCollege - 1:
  yearCost = baseCost × (1 + collegeInflation)^(yearsUntilCollege + year)
totalCost = sum(yearCosts)
targetAmount = totalCost × coverageGoal

// Projected 529 balance
FV_current = currentSavings × (1 + monthlyReturn)^(months)
FV_contributions = monthlyContribution × [((1 + monthlyReturn)^months - 1) / monthlyReturn]
projected529Balance = FV_current + FV_contributions

// Coverage percentage
coveragePercentage = (projected529Balance / totalCost) × 100

// Funding gap
gap = max(0, targetAmount - projected529Balance)

// Monthly needed to reach the coverage goal (on top of what you already save)
monthlyNeeded = gap / [((1 + monthlyReturn)^months - 1) / monthlyReturn]
// With a 0% return the contributions simply add up: monthlyContribution × months

Data Sources

• College Board, "Trends in College Pricing and Student Aid 2025" (2025-26 academic year) — Base costs are the average full-time undergraduate budgets: public four-year in-state $30,990, public four-year out-of-state $50,920, private nonprofit four-year $65,470, public two-year in-district $21,320. Each includes tuition and fees, housing and food, and books, supplies, transportation and other expenses. The cost breakdown uses the same tables (e.g. in-state: $11,950 tuition and fees, $13,900 housing and food, $5,140 other); private housing and food ($15,920) and two-year other costs ($6,320) are the remainder of the published budget.
• SECURE 2.0 Act Section 126 — Allows up to $35,000 lifetime rollover from 529 to Roth IRA if the 529 account has been open for 15+ years.
• IRS Publication 970 — Tax benefits for education, 529 plan rules.

Limitations

• College inflation (5%) is higher than general inflation — this is an assumption, not a guarantee. For comparison, the College Board reports that published tuition and fees rose 2.7% to 4.0% from 2024-25 to 2025-26, before adjusting for inflation.
• Each college year is priced at its own year's projected cost, and the total is compared with your balance on the day college starts. Growth on the balance while it is being spent, and any contributions made during college, are not counted, so the gap shown may be somewhat larger than you would actually face.
• Does not model financial aid, scholarships, or grants that may reduce out-of-pocket costs.
• 529 earnings are free of federal income tax when they are spent on qualified higher education expenses (26 U.S.C. 529(c)(1) and (c)(3)(B)); some states also give a deduction or credit for contributions, which this calculator does not estimate.
• Uses a constant investment return — does not model age-based allocation shifts.
• The SECURE 2.0 Roth rollover ($35K cap) is noted but not modeled in the projection.
• Does not compare 529 vs. alternative savings vehicles (Coverdell, UTMA, taxable brokerage).

Last Updated

April 2026 — SECURE 2.0 Roth rollover rules.

October 2026 — Base costs moved to the College Board 2025-26 budgets. Until now the calculator used rounded 2024-25 figures ($28,000 / $45,000 / $60,000 / $12,000) while this page quoted tuition-only figures, and the breakdown used a fixed 50/35/15 split instead of the published components.

14 October 2026 — The calculator now prices each college year at its own year's projected cost, as the formula above describes. It used to price every year at the first year's cost, so a four-year total at 5% college inflation came out about 7% low (a private college starting in two years: $288,723 instead of $311,108).

14 October 2026 (later) — The result sentence now names your coverage goal. With a 25% goal and 27% coverage it used to say “You are on track to fully fund college costs”, and with a 50% goal it said the monthly amount that reaches 50% would “fully fund”. It now says “on track for your 25% goal” or “to reach your 50% goal”, and “fully fund” only at 100% coverage or more.

14 October 2026 (removal) — The yearly 529 tax benefit figure is removed. It was 5% of your contributions, with no per-state deduction data behind it.