College Fund Calculator (529 Plan)
College Savings Plan
How much should you save monthly for college?
Formula
Monthly Payment = (Target - FV of Current Savings) × r / ((1+r)^n - 1) | Target = Annual Cost × (1+inflation)^years × college years × coverage% | r = monthly return, n = months until college. College inflation ≈ 5%/year.
Frequently Asked Questions
What is a 529 plan?
A 529 plan is a tax-advantaged savings account for education expenses. Investment growth is federal tax-free, and withdrawals are tax-free when used for qualified education expenses (tuition, room, board, books, computers). Over 30 states offer additional state tax deductions or credits for contributions.
How much should I save per month for college?
For a child born today, saving $250-$400/month from birth typically covers in-state public college costs with moderate investment returns. For private universities, $500-$800/month may be needed. Starting earlier dramatically reduces the monthly amount needed due to compound growth.
What if my child gets a scholarship or doesn't go to college?
529 plans are flexible: you can change the beneficiary to another family member (sibling, cousin, or even yourself). Since 2024, up to $35,000 in unused 529 funds can be rolled into a Roth IRA for the beneficiary. If withdrawn for non-education purposes, you pay taxes and a 10% penalty on earnings only (not contributions).
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