Plan for education costs with inflation-adjusted projections. Enter your child's age, target school costs, and current savings to see exactly how much you need to save each month.
2 In-Depth Guides
Complete guide to 529 plans in 2026. Learn how to estimate college costs, choose the right plan, pick investments, and use new Roth IRA rollover rules.
Read Full GuideA comprehensive strategy combining 529 plans, scholarships, financial aid, work-study, and smart school choices to minimize or eliminate student loan debt.
Read Full GuideCollege costs have risen roughly 5–8% annually — far outpacing general inflation. A year at a state school that costs $28,000 today will cost approximately $45,000 in 10 years at 5% inflation. A 529 plan is the most tax-efficient way to save for these rising costs, offering tax-free growth and withdrawals for education expenses.
The key advantages are tax-free growth and tax-free withdrawals for qualified expenses. Additionally, over 30 states offer income tax deductions on contributions. Starting a 529 when your child is born gives you 18 years of compounding, which dramatically reduces the monthly contribution needed compared to starting at age 10 or later.
Consider two families saving for the same $200,000 goal at 7% return: Family A starts at birth and needs $460/month. Family B starts at age 10 and needs $1,250/month. Starting 8 years earlier cuts the required contribution by 63%. Even small contributions ($100/month) at birth grow to over $40,000 by age 18.
Most 529 plans offer age-based portfolios that automatically shift from aggressive (stocks) to conservative (bonds/cash) as your child approaches college. This is the simplest approach. For hands-on investors, individual fund options let you customize your allocation. A common approach: 80–100% stocks when your child is under 10, gradually shifting to 40–60% bonds in the final years before college.
A 529 plan is a tax-advantaged savings plan designed for education expenses. Contributions grow tax-free, and withdrawals for qualified education expenses (tuition, books, room and board, computers) are also tax-free. Most states offer additional state income tax deductions for 529 contributions. You can use 529 funds at any accredited college or university nationwide, and up to $10,000/year for K-12 tuition.
Average annual costs for 2025-2026 are approximately $24,000–$28,000 for in-state public universities (tuition + room and board), $44,000–$58,000 for out-of-state public, and $58,000–$62,000 for private universities. College costs have historically risen 5–8% annually, significantly faster than general inflation. Our calculator accounts for this education-specific inflation.
A common rule of thumb is to aim for one-third of projected costs from savings, one-third from current income during college years, and one-third from financial aid and scholarships. For a newborn targeting an in-state public university, saving $300–$500/month in a 529 plan with market-rate returns typically covers the savings portion. Starting earlier dramatically reduces the monthly requirement.
Starting in 2024, unused 529 funds (held 15+ years) can be rolled into a Roth IRA for the beneficiary, up to $35,000 lifetime limit. You can also change the beneficiary to another family member (sibling, parent, cousin, etc.) for their education expenses. Non-qualified withdrawals are subject to income tax plus a 10% penalty on the earnings portion only — the contributions come out tax- and penalty-free.
Check if your state offers a tax deduction for 529 contributions — over 30 states do. If so, your state plan may be worth it even if fees are slightly higher. If not, choose the plan with the lowest fees and best investment options regardless of state. Top-rated plans include Utah's my529, Nevada's Vanguard 529, and New York's Direct Plan. You can use any state's plan for any school nationwide.
Parent-owned 529 plans are reported as parent assets on the FAFSA and assessed at a maximum rate of 5.64% — much lower than student assets (20%). Grandparent-owned 529 plans are no longer counted as income on the FAFSA (starting 2024-25), making them even more favorable. A 529 plan has minimal impact on financial aid compared to other savings vehicles.
More Tools
Get a complete picture of your finances with our full suite of free calculators and planning tools.
Calculate exactly how much you need to save each month to reach your financial goals — house, car, emergency fund, or any target.
Find the fastest way to become debt-free. Compare avalanche vs snowball strategies and see your personalized payoff timeline.
See if you're on track for retirement. Calculate how much you need to save and when you can retire comfortably.
Plan your portfolio growth with inflation-adjusted projections. Compare nominal vs. real returns across conservative, moderate, and aggressive strategies.
Get a clear picture of your income vs expenses. Identify where your money goes and find opportunities to save more.
Get personalized financial advice powered by AI. Input your situation and receive a custom financial roadmap in seconds.
Calculate your net worth by listing assets and liabilities. Track your financial health with visual breakdowns.
Find out how much you need in your emergency fund and how long it will take to build it at your current savings rate.
Visualize the power of compound interest. Compare daily, monthly, quarterly, and annual compounding with year-by-year breakdowns.
Calculate your monthly mortgage payment including taxes, insurance, and PMI. View detailed amortization schedules.
See how inflation erodes your purchasing power over time. Calculate future costs and plan to protect your wealth.
Calculate your monthly car payment, total interest cost, and see amortization schedules. Factor in down payment, trade-in, and sales tax.
Estimate your 2026 federal income tax with detailed bracket breakdowns. See effective rate, marginal rate, and take-home pay instantly.
Calculate your path to Financial Independence and Retire Early. Find your FIRE number, years to freedom, Coast FIRE, and Lean FIRE milestones.
Compare the true cost of renting vs buying a home. See breakeven year, equity growth, and total cost side-by-side over any time horizon.
Calculate your net paycheck after federal taxes, Social Security, Medicare, and deductions. See exactly what you take home per pay period.
Plan your student loan repayment with standard, extended, and graduated plans. See how extra payments accelerate your payoff and save on interest.
Calculate your Return on Investment and compare it against S&P 500, bonds, and savings benchmarks. Find annualized returns instantly.
Compare two loan offers side by side. See monthly payments, total interest, total cost, and which option saves you more money.
Escape the minimum payment trap. See how long it takes to pay off your credit card and how much you save by paying more each month.
Build an optimized CD ladder to maximize returns while keeping money accessible. See interest per rung and reinvestment projections.
Calculate your Health Savings Account tax savings, investment growth, and the triple tax advantage over time.
Estimate your 2026 capital gains tax on stocks, real estate, and investments. Compare short-term vs long-term rates with NIIT surtax.
Estimate your Social Security retirement benefits. Compare claiming at 62, full retirement age, or 70 to maximize lifetime income.
Plan for college expenses with inflation-adjusted cost projections and 529 investment growth.