Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
Our free 529 plan and college savings calculator will help you see the growth of your college savings investments based on the rate of return you choose. If you don't know where to start, check out our 529 plan by age.
You can adjust the child's age and monthly contribution and rate of return to get the estimated total value of your future 529 college savings plan.
Important things to know about this 529 plan calculator
This calculator is designed to help you determine how much you need to save for college. However, it's important to remember that you probably won't need to save the entire expected total cost of college. The reason for this is because 85% of first-year students typically receive some type of financial aid.
Additionally, there are many low-cost options for college, such as starting at community college (which is free in a third of states) and then transferring to a local state college. The key is that you probably don't want to invest too much in a 529 plan, as it can be difficult to avoid the 529 plan penalty.
To use this calculator, start with your child's age.
Then enter the current balance of your college savings account (if you're just starting out, it may be $0).
Then enter an estimated monthly contribution. Note: 38% of 529 plans now have automatic contributions enabled. If you don't have a set amount, just estimate your annual contribution per month. For example, if you contribute $1,200 per year, that's $100 per month.
Finally, estimate the rate of return you expect. We'll use a conservative 7%, taking into account the average performance of the S&P 500 and subtracting fees and expenses. You might earn more, but you could also earn less. We recommend being conservative, especially if you're using a “target date” 529 plan fund. These funds may yield less because they'll be rotated into safer investments as your child gets older.
Related: The best 529 plans based on performance
How much should you save for college?
Our 529 Plan By Age guide outlines how much you should save for college, but the bottom line is that you'll probably want to have between $37,000 and $245,000 saved for college. That's a huge range, but it reflects both the reality of college costs and the ability of families to save for college.
With at least $37,000, you should be able to fully fund a four-year degree at low-cost institutions such as community colleges and state schools.
At $245,000 at the top end of the scale, you should be able to cover the cost of a four-year degree at most expensive private schools, assuming you pay full list price.
However, we know that most families pay somewhere in between. And simply saving money for college is a great way to offset the need for student loans.
Use this calculator to understand how small investments over time can actually build a nice nest egg for college.
Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
