529 plan projection calculator

Inputs

Current 529 balance	$5,000
Monthly contribution	$400
Years until college starts	14
Expected annual return %	6.5%
Current annual tuition + room/board	$32,000
Tuition inflation %	4.5%
Years of school	4

Supporting metrics

Inflated annual tuition	$59,262
Total 4-year cost	$253,535
% of cost covered	48%
Shortfall (negative = surplus)	$131,982
Total contributions made	$72,200

About this calculator

529 plan math — compound growth vs tuition inflation

Two opposing exponentials race over your child's lifetime:

Your contributions compounding at expected market return (~6-7% real-equivalent)
Tuition inflating at 4-6%/year (above general CPI for the last 30 years)

The gap between these two rates is what your monthly contribution has to close. Tuition has historically inflated at 4.5-5.5%/year — fast enough that "saving for college" requires aggressive investment growth, not just savings.

Plan structure

Tax treatment: contributions made with after-tax dollars; growth and qualified withdrawals tax-free for federal (some states give a deduction for contributions to in-state plans)
Account ownership: typically parent or grandparent (parent-owned has minor FAFSA impact, ~5.6% of balance counted as parent assets)
Beneficiary changes: can be reassigned to siblings, cousins, even self
Non-qualified withdrawals: 10% penalty + tax on gains (no penalty on principal)

What "qualified" covers

Tuition (any accredited college, US or foreign-eligible)
Fees, books, required supplies
Room and board (if enrolled at least half-time)
K-12 tuition (up to $10k/year, federal — state rules vary)
Apprenticeship programs
Up to $10k of student loan principal per beneficiary (lifetime, post-SECURE Act)

Risk: over-saving

If the beneficiary doesn't go to college (or goes to a cheaper one), excess funds either:

Reassign to another beneficiary (sibling, relative, eventually grandchild)
Withdraw with 10% penalty + tax on gains
New: roll over to Roth IRA in beneficiary's name (up to $35k lifetime, account must be 15+ years old, SECURE 2.0 rule)

The Roth-rollover provision largely eliminated the over-save risk. As long as you don't go wildly above projected need, the 529 is rarely "wasted."

The age-based fund choice

Most 529 plans offer age-based portfolios that automatically shift from equity-heavy to bond-heavy as college approaches. Use them unless you have a strong reason to override. They handle the glide-path so you don't have to.

FAQ

529 vs UTMA/UGMA?

529 wins on tax (UTMA/UGMA gains are taxed annually at kid's rate; 529 grows tax-free), control (parent retains control of 529; UTMA transfers fully to the child at 18-21), and flexibility (529 can change beneficiary; UTMA cannot). UTMA's only advantage: spending isn't restricted to education.

What if my kid gets a full scholarship?

Withdraw up to the scholarship amount with NO 10% penalty (still pay tax on gains). Or roll the surplus to Roth IRA per SECURE 2.0 rules ($35k lifetime cap, account age 15+). Or change the beneficiary to a sibling. Multiple escape valves.

How much should I aim to cover?

Common targets: 50% (expectation that kid contributes via summer jobs + modest loans), 100% (full ride from parents), or 'in-state public' (covers any state school, kid pays gap if they choose private). The 100% private school target is the hardest math — usually requires $600-1000/month from birth.

What if I can't afford much per month?

Even $50-100/month started early is meaningful. The compounding does most of the work — $100/month for 18 years at 6.5% = ~$40k. That covers in-state public tuition for 1-2 years. The kid borrowing the rest at 6% federal rates is not a disaster — assuming reasonable degree choice.