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529 Plan Calculator

Enter your starting balance, monthly contribution, expected return, and years until college.

How it is calculated

The annual return is turned into a monthly rate, r = annual_return / 12 / 100, and the term into months, n = years × 12. The starting balance P and the monthly deposits PMT are compounded separately: FV = P × (1 + r)n + PMT × ((1 + r)n − 1) / r. Deposits are assumed to go in at the end of each month. At a 0% return the formula is replaced by P + PMT × n. The tool shows the future value, the total contributed (P + PMT × n) and the growth, which is the difference. Negative balances, deposits or returns, and a term of zero years, give no result. Fees, taxes, state deductions and rising tuition are not modelled.

Worked example

Start with $5,000, add $250 a month, assume 6% a year for 15 years. Monthly rate: 6 / 12 / 100 = 0.005. Months: 15 × 12 = 180. Growth factor: 1.005180 ≈ 2.4541. The starting balance grows to about $12,270; the deposits grow to about $72,705. Together the future value is $84,975.15. You paid in $5,000 + 250 × 180 = $50,000.00, so growth is $34,975.15.

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Common mistakes

  • Typing the return as a decimal (0.06) instead of a percentage (6). The engine divides by 100, so 0.06 means 0.06% a year and the projection barely grows.
  • Entering the yearly contribution in the monthly field. The tool multiplies the figure by 12, so $3,000 a year is $250 a month, not $3,000.
  • Using the number of years of college rather than the years until the first enrolment. The projection ends when the money is first needed; later withdrawals while still invested are not modelled.
  • Treating the result as guaranteed. A fixed return is a single assumption, and real investments move year to year; try a lower and a higher rate to see the range.
  • Expecting a negative return to work. Rates below 0% are rejected, so test downside cases with 0%.

Sources

About this calculator

A 529 plan is a US tax-advantaged education savings account whose future value follows standard compound-growth math: an initial balance grows at the expected annual return over the years until college, while monthly contributions accumulate as a separate annuity stream, so the total is roughly FV = P(1+r)^n + PMT × [((1+r)^n − 1) / r] applied on a monthly-compounding basis. Because contributions and growth compound together, starting years earlier — even with the same total contributed — produces a meaningfully larger balance at enrollment time.

Parents, grandparents and financial planners use this projection to decide how much to contribute monthly, compare different expected-return assumptions, and see whether a savings plan is on track to cover a realistic share of future tuition.

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Comments (1)

  • Editorial team

    Run the same plan at 0%, 4% and 8% to see a range instead of one number; at 0% the growth line is exactly zero, so you see your pure savings. The tool follows the US 529 savings idea, with deposits at the end of each month and a fixed return, and it knows nothing about state tax rules or what counts as a qualified expense. How many years until college are you planning around?

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