- The projected cost is the denominator of the whole answer, so research the actual institutions rather than accepting any calculator’s built-in average — including the absence of one here.
- Each year of school is paid in a different year and has to be inflated separately; inflating the whole bill to the enrollment date understates it.
- Education cost inflation has historically run ahead of general inflation, so setting them equal quietly flatters the coverage percentage.
- Partial funding is a normal outcome — the coverage percentage is more useful as a planning number than as a pass or fail.
How the 529 calculator works
A 529 plan is an investment account whose growth is never taxed as long as the money is spent on qualified education costs. That makes it a race between two compounding curves: what your contributions grow into, and what the education costs grow into. This page runs both and reports the ratio, which is a more useful answer than either number on its own, because a shortfall you can see as a percentage is a shortfall you can act on.
Every cost figure on this page is yours to supply. There is no national average tuition table behind it, because this site does not hold one and a made-up one would be the single most consequential invented number here — the projected cost is the denominator of the entire answer, so an error in it moves the coverage percentage more than an error in anything else. Look up the published cost of the actual institutions you have in mind, or the ones you consider plausible, and enter that. A specific number you researched beats a national average that describes nobody.
The savings side compounds forward from today’s balance and your monthly contribution to the year the child enrolls. The cost side compounds forward at the education inflation rate you set, which is worth setting higher than general inflation — published tuition has historically outrun consumer prices for long stretches. The two curves then meet at enrollment, and the difference between them is the shortfall the calculator solves for.
The math
The account is projected one year at a time. Each year the opening balance earns a full year of return and that year’s contributions earn roughly half a year, the mid-year convention, because monthly contributions arrive across the year rather than on the first day of it. Crediting a full year of growth to money paid in monthly overstates a long projection by several percent, and over eighteen years that is real money rather than rounding.
The cost side is where most calculators go quietly wrong. Each year of school is paid in a different calendar year, so each has to be inflated for a different number of years — the first year to enrollment, the second to a year later, and so on. Inflating the whole multi-year bill to the enrollment date treats the final year as if it were paid on day one, and understates the total. This page inflates year by year and sums the results, which is the only version that matches how the bills actually arrive.
The monthly contribution that fully funds the plan is solved rather than searched for. Today’s balance is grown to enrollment on its own, subtracted from the projected cost, and the remainder is divided by the future-value factor of a stream of annual contributions under the same mid-year convention, then by twelve. State income tax deductions for 529 contributions exist in many states, vary widely in size and in whether they require using your own state’s plan, and are not modelled here — treat any state benefit as a bonus on top of the answer this page gives you.
Worked example
Start with $10,000 saved, $300 a month, a child aged 5 enrolling at 18, and a 6% return. By enrollment the account is worth about $91,300, of which $56,800 is contributions and roughly $34,500 is growth. Against a programme costing $28,000 a year today, inflating at 5% for four years of school, the projected total is about $227,600. Coverage: 40%. The shortfall is roughly $136,200, and fully funding it would take about $884 a month instead of $300.
The year-by-year inflation is not a detail. Inflating that same four-year bill in one lump to the enrollment date gives about $211,200 — roughly $16,400 less, because it prices the final year of school thirteen years out instead of sixteen. That understatement is about 7% of the whole cost, and it lands entirely on the shortfall, which is the number a parent is actually deciding on.
Key terms
- Qualified education expense
- A cost a 529 withdrawal can cover tax-free: tuition, fees, books, equipment, and room and board within limits. Withdrawals for anything else owe tax and a penalty on the growth portion.
- Beneficiary
- The person whose education the account is for. The beneficiary can be changed to another qualifying family member, which is what makes over-saving less risky than it sounds.
- Education cost inflation
- The annual rate at which the published cost of the programme rises. It is a separate input from your investment return, and the gap between the two is what decides coverage.
- Coverage
- The projected balance at enrollment divided by the projected total cost of the programme, expressed as a percentage.