Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A 529 plan grows tax-advantaged, and time does more of the work than the size of the deposits. Starting with $5,000 and adding $250 a month at 6 percent for 18 years reaches about $111,522, of which about $59,000 is what you deposited. Starting the same plan six years later, with only 12 years to grow, ends near $62,800, roughly half. The return is an assumption and can be negative in a bad stretch, especially close to enrollment.
Before you rely on it
What to check
Look at how the plan's investments shift as enrollment nears. A portfolio that is mostly stocks at 17 carries a risk that a mostly stable one does not.
The common error
Where people go wrong with 529 plan growth calculator
Assuming the projected balance is a guarantee. It is a scenario, and a lower return or a missed deposit changes the end result.
Sensitivity evidence
How expected annual return changes the future value
| Expected annual return | Future value | Estimated growth |
|---|---|---|
| 4.0% | $89,158 | $30,158 |
| 5.0% | $99,576 | $40,576 |
| 6.0%worked example | $111,522 | $52,522 |
| 7.0% | $125,243 | $66,243 |
| 8.0% | $141,024 | $82,024 |
Every input, tested
Which input moves the future value most
| Input | Tested from | To | Future value at each end | Swing |
|---|---|---|---|---|
| Time horizon | 13.0 years | 23.0 years | $69,748 to $167,869 | $98,121 (88%) |
| Expected annual return | 5.0% | 7.0% | $99,576 to $125,243 | $25,667 (23%) |
| Monthly contribution | $225 | $275 | $101,838 to $121,206 | $19,368 (17%) |
| Starting amount | $4,500 | $5,500 | $110,054 to $112,991 | $2,937 (2.6%) |
| Compounds per year | Annually | Daily | $111,110 to $111,560 | $450 (0.4%) |
Two variables at once
Future value by expected annual return and starting amount
| Expected annual return \ Starting amount | $4,000 | $5,000 | $6,000 |
|---|---|---|---|
| 4.0% | $87,106 | $89,158 | $91,210 |
| 5.0% | $97,121 | $99,576 | $102,031 |
| 6.0% | $108,585 | $111,522 | $114,459 |
| 7.0% | $121,730 | $125,243 | $128,755 |
| 8.0% | $136,824 | $141,024 | $145,225 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Starting amount | $5,000 |
| Monthly contribution | $250 |
| Expected annual return | 6.0% |
| Time horizon | 18.0 years |
| Compounds per year | Monthly |
| Future value | $111,522 |
| Estimated growth | $52,522 |
Complete evidence
Full projection schedule
Show all 18 rows
| Period | Opening balance | Contribution | Growth | Ending balance |
|---|---|---|---|---|
| Year 1 | $5,000 | $3,000 | $300 | $8,300 |
| Year 2 | $8,300 | $3,000 | $498 | $11,798 |
| Year 3 | $11,798 | $3,000 | $708 | $15,506 |
| Year 4 | $15,506 | $3,000 | $930 | $19,436 |
| Year 5 | $19,436 | $3,000 | $1,166 | $23,602 |
| Year 6 | $23,602 | $3,000 | $1,416 | $28,019 |
| Year 7 | $28,019 | $3,000 | $1,681 | $32,700 |
| Year 8 | $32,700 | $3,000 | $1,962 | $37,662 |
| Year 9 | $37,662 | $3,000 | $2,260 | $42,921 |
| Year 10 | $42,921 | $3,000 | $2,575 | $48,497 |
| Year 11 | $48,497 | $3,000 | $2,910 | $54,406 |
| Year 12 | $54,406 | $3,000 | $3,264 | $60,671 |
| Year 13 | $60,671 | $3,000 | $3,640 | $67,311 |
| Year 14 | $67,311 | $3,000 | $4,039 | $74,350 |
| Year 15 | $74,350 | $3,000 | $4,461 | $81,811 |
| Year 16 | $81,811 | $3,000 | $4,909 | $89,719 |
| Year 17 | $89,719 | $3,000 | $5,383 | $98,103 |
| Year 18 | $98,103 | $3,000 | $5,886 | $106,989 |
Where the inputs come from
Starting amount is the current 529 balance, monthly contribution is what you add, expected return depends on the investment option: age-based portfolios move from stocks to bonds as the beneficiary nears college, so the return assumption should fall over time. Time horizon is the years until the first tuition payment. Use a conservative return, and check the plan's fees, which are listed in its disclosure document and vary a lot between states.
Using the future value in a real decision
Qualified withdrawals for tuition, fees, books and room and board are tax free at the federal level, which makes the growth worth more than in a taxable account.
When the result stops applying
The return is a guess, and an age-based portfolio has a lower return late in the period. Withdrawals for non-qualified purposes face income tax on the earnings plus a 10% penalty. Some states offer a deduction or credit for contributions, and the rules differ. Leftover funds can be transferred to another family member, or in some cases rolled to a Roth IRA, subject to limits.
What to compare it with
Set a monthly target with the college savings goal calculator, and estimate the price with the college cost calculator. The 529 state tax benefit page values a state deduction. The savings growth and compound interest calculators show similar growth math for other accounts.
People also ask
Frequently asked questions
What can 529 money be used for?
Qualified education costs such as tuition, fees, books, required supplies and room and board, and in some cases K-12 tuition and student loan repayment up to limits.
What happens if my child does not go to college?
You can change the beneficiary to another family member, use it for the beneficiary's later education, or withdraw it and pay tax and a penalty on the earnings.
Can unused 529 funds go to a Roth IRA?
Under current law, limited amounts of a long-held 529 can be rolled into a Roth IRA for the beneficiary, subject to conditions and annual limits.