Project your 529 balance at college start, factor in tuition inflation, and see what monthly contribution closes the gap to your target.
Projected 529 balance at college start
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Target cost at college start
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Recommended monthly to fully fund
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Saving against a target that keeps moving
A 529 plan is a state-sponsored education account where investments grow tax-free and withdrawals for qualified education expenses come out tax-free as well. The hard part of planning for college is not the account, it is that the goalpost moves every year. College costs have historically risen around 5 to 6 percent annually, faster than general inflation, so a price tag that looks manageable today can nearly double over a young child's runway. This calculator does two things at once: it grows your current balance and monthly deposits forward, and it inflates your target cost to what it will actually be when your child enrolls.
It is meant for parents, and grandparents, who want an honest read on whether their current saving pace closes the gap or leaves one. The recommended monthly figure it produces is the deposit that would fully fund the inflated target by college start, given your existing balance and return assumption.
A three-year-old and a $120,000 goal
Start with a child age 3 heading to college at 18, so 15 years of runway. You have $10,000 saved, you add $300 a month, and you assume a 6 percent return. The account grows to about $112,223. But the target tells the sobering half of the story. A $120,000 cost today, inflated at 5 percent for 15 years, balloons to roughly $249,471. Your projected balance falls about $137,249 short. To fully fund that inflated number, the tool says you would need to contribute about $773 a month, not $300.
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The chart lines up the projected balance against the inflated target so the shortfall is impossible to miss.
Why starting at birth beats catching up later
The same gap looks very different depending on when you start. A parent who opens the account when the child is born has 18 years of compounding and can reach a large target with a modest monthly deposit. A parent who waits until the child is 10 has only eight years, and the required monthly contribution to hit the same inflated number can be three or four times higher, because there is far less time for growth to do the work. This is the strongest argument for funding a 529 early and consistently, even in small amounts. If you are starting late, do not despair at the recommended figure; contribute what you can, and lean more on the dial that you control, which is the share of cost you intend to cover rather than the full sticker price.
A reality check before you panic at the gap
A shortfall on paper is not a failure. Few families fully fund college from a 529 alone, and they should not feel obligated to. Financial aid, scholarships, a student contribution from part-time work, and current income during the college years all fill part of the gap. My practical advice is to treat the recommended monthly figure as the ceiling, not the requirement, and aim to cover the slice of cost you actually intend to pay from savings. Overfunding a 529 has its own friction, since non-qualified withdrawals owe income tax plus a 10 percent penalty on the earnings.
Things parents ask me
Is there a state tax break for contributing?
In many states, yes. Over 30 states offer a state income tax deduction or credit for 529 contributions, though the cap and whether you must use your home state's plan vary widely. The federal tax-free growth applies everywhere; the state deduction is a separate, location-specific bonus worth checking before you pick a plan.
Can leftover 529 money move to a Roth IRA?
Under rules effective in 2024, up to a $35,000 lifetime amount can be rolled from a 529 to the beneficiary's Roth IRA, provided the account has been open at least 15 years and subject to annual Roth contribution limits. It is a useful escape valve for modest leftover balances, not a way to shelter a large surplus.