What if I overshoot and save too much?

A 529 account can be transferred to another beneficiary (a sibling, cousin, or even yourself) with no tax penalty. Starting in 2024, unused 529 funds can also be rolled over to a Roth IRA for the beneficiary, subject to annual contribution limits and a 15-year account seasoning requirement.

Do 529 assets affect financial aid eligibility?

Yes, but modestly. A parent-owned 529 is assessed at a maximum rate of 5.64% in the FAFSA formula, compared to 20% for assets held directly in the student's name. Grandparent-owned 529 plans have no impact on FAFSA under rules that took effect for the 2024-2025 aid year.

College Savings Calculator (529 Plan)

College costs have historically risen about 4-6% per year — faster than general inflation. A 529 college savings plan lets your money grow tax-free when used for qualified education expenses. This calculator shows your target savings goal and the monthly contribution needed to reach it, given your time horizon and expected investment return.

How this calculator works

Projected Total Cost = Annual Cost × (1 + Inflation Rate)^Years for each year of college, summed across the enrollment period. Future Value of Current Balance = Current Balance × (1 + Monthly Return)^Months. Monthly Contribution Needed = (Total Cost - FV of Current Balance) × Monthly Return / ((1 + Monthly Return)^Months - 1). The result is the level monthly contribution required assuming a constant return.

Formula reference: SEC: Introduction to 529 Plans

Example

Example: $30,000/year current tuition, 10 years until college, 4-year program, 5% annual tuition inflation, 6% expected return, $5,000 current balance. Projected total cost: ~$195,000. Required monthly contribution: ~$700.

Frequently asked questions

What if I overshoot and save too much?: A 529 account can be transferred to another beneficiary (a sibling, cousin, or even yourself) with no tax penalty. Starting in 2024, unused 529 funds can also be rolled over to a Roth IRA for the beneficiary, subject to annual contribution limits and a 15-year account seasoning requirement.
Do 529 assets affect financial aid eligibility?: Yes, but modestly. A parent-owned 529 is assessed at a maximum rate of 5.64% in the FAFSA formula, compared to 20% for assets held directly in the student's name. Grandparent-owned 529 plans have no impact on FAFSA under rules that took effect for the 2024-2025 aid year.

This calculator provides estimates for general informational purposes only and does not constitute financial, tax, or legal advice. Always confirm important numbers with a qualified professional or your lender/institution before making a decision.