College Savings Calculator
Calculate monthly savings needed for a 529 plan to fund your child's college education.
Frequently Asked Questions
What is a 529 plan?
A 529 plan is a tax-advantaged savings plan for education expenses. Contributions grow tax-free, and qualified withdrawals for education are also tax-free. Plans are offered by states and educational institutions, with various investment options.
Is there a contribution limit to 529 plans?
Annual gift tax exclusion is $18,000 per donor per beneficiary (2024). Some states offer additional state tax deductions. Aggregate plan balances shouldn't exceed the expected cost of attendance at a university, which is typically several hundred thousand dollars.
What happens if my child doesn't go to college?
Starting in 2024, you can roll over up to $35,000 to a Roth IRA for the beneficiary (with restrictions). Alternatively, the beneficiary can be changed to another family member, or withdrawals can be made subject to income tax and a 10% penalty on earnings.
How much should I expect in investment returns?
Historical stock market returns average 7–10% annually, but vary year to year. Bond returns are typically 3–5%. A balanced portfolio might return 5–7%. Adjust based on your risk tolerance and years until college.
Can I use 529 funds for private schools or trade schools?
Yes. Qualified education expenses include tuition, fees, books, supplies, and room and board at accredited colleges, universities, trade schools, and apprenticeship programs. Starting in 2024, up to $35,000 can even transfer to a Roth IRA.