A tax-advantaged education savings account: contributions grow tax-free and withdrawals for qualified education expenses are untaxed. Many states add a state-tax deduction for contributions. Unused funds can be transferred to another family member, and up to $35,000 (lifetime) can be rolled to the beneficiary's Roth IRA under current rules.

College Savings Calculator

Q: How much should I save monthly for college?

For a newborn heading to a public in-state school (about $27,000 per year today), saving roughly $350-$400 per month in a 529 earning 6% typically covers most of the projected four-year cost. Starting later raises the number steeply — at age 10, closer to $800 per month.

Q: How fast does college tuition rise?

Historically about 4-6% per year — well above general inflation, though it has moderated recently. Small changes in this assumption compound heavily over 18 years, so plan with 4-5% to be safe.

Q: What happens to unused 529 funds?

They aren't lost. Unused funds can be transferred to a sibling or other qualifying family member, kept for the original beneficiary's graduate school, or — under current rules — up to $35,000 (lifetime) can be rolled into the beneficiary's own Roth IRA if the account has been open at least 15 years.

Q: Are there penalties for non-qualified 529 withdrawals?

Yes, but only on the earnings portion: it's taxed as ordinary income plus a 10% federal penalty. Your original contributions come back out with no tax or penalty, since they went in after-tax (aside from any state deduction already claimed, which some states recapture).

Project what four years of college will cost when your child gets there — and the monthly 529 contribution that gets you ready for it.

Written by the Calculator Index team · Last reviewed September 2026

Save this much per month

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Projected 4-year cost

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Your savings target

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First-year cost at 18

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Years until college

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How the projection works

Cost in year N = Today's cost × (1 + tuition inflation)^N
Required PMT: future value of monthly savings = target − growth of current savings

The model inflates each of the four college years separately, sums them, applies your coverage percentage, then solves for the monthly contribution whose future value (with your current savings' growth) hits that target by age 18.

Worked example

Age 3 · in-state cost $27,000/yr · tuition inflation 5% · covering 75% · $5,000 saved · 6% return

Four years starting at 18 project to about $243,000; 75% target ≈ $182,000. With 15 years of growth, that requires roughly $540/mo.

Worked example — starting later, private school, full coverage

Age 10 · private school cost $60,000/yr today · 5% tuition inflation · covering 100% · $20,000 saved · 6% return — only 8 years until college instead of 15.

Four inflated years sum to roughly $382,000. The $20,000 already saved grows to about $31,900 over 8 years, leaving a $350,200 gap. Solved over 96 months at 6%, that requires about $2,870/mo — more than five times the first example's monthly number, mostly because of the shorter runway and higher, fully-covered private-school cost rather than the later start alone.

Average college cost today, by school type

School type	Typical annual cost today
Public, in-state	≈ $27,000
Public, out-of-state	≈ $45,000
Private	$60,000+

Common college savings mistakes

Assuming a fixed dollar target instead of inflating tuition. As the private-school example shows, tuition inflation compounds heavily over a decade or more — plan with 4-5%, not today's price tag.
Ignoring the effect of a shorter time horizon. The same target reached in 8 years instead of 15 requires a dramatically higher monthly contribution, since there's less time for growth to do the work.
Ignoring that unused funds aren't wasted. Overshooting the target is far less risky than it used to be now that leftover 529 funds can move to a sibling or partially roll into a Roth IRA.

Why the 529 wrapper matters

The same savings inside a 529 beats a taxable account because growth and qualified withdrawals are tax-free — over 15 years that's often five figures kept. Many states also deduct contributions from state income tax. Two planning notes: financial aid formulas count parent-owned 529s lightly (max ~5.6% of value), so saving doesn't wreck aid eligibility; and over-saving is less risky than it used to be, since leftover funds can move to a sibling or partially roll into the child's Roth IRA. If the monthly number looks impossible, remember the coverage slider — most families target a share, not 100%, and bridge the rest with aid and borrowing kept modest. Compare growth scenarios in the investment calculator.

Frequently asked questions

How much should I save monthly for college?

Newborn + public in-state + 6% returns ≈ $350–$400/mo for most of the cost; starting at age 10 roughly doubles that.

What is a 529 plan?

Tax-free growth and withdrawals for education, often with a state-tax deduction; leftover funds are transferable and partially Roth-rollable.

How fast does college tuition rise?

Historically 4–6%/yr — above general inflation. Plan with 4–5%.

What happens to unused 529 funds?

They transfer to a sibling or family member, stay for grad school, or up to $35,000 lifetime can roll into the beneficiary's Roth IRA (account open 15+ years).

Are there penalties for non-qualified 529 withdrawals?

Only on earnings — taxed as income plus a 10% penalty. Original contributions come out tax- and penalty-free.

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Note: College costs and 529 rules vary by state and change over time; verify current limits and tax treatment. Not financial advice. Last reviewed: September 2026.