Smart Financial Media Group

College Savings Calculator

Estimate how much you need to save for your child's college education — and whether you're on track.

Estimated Future Cost (4 years):$263,991
Projected Savings at College Start:$92,407
Savings Gap:$171,584
Years Until College:13

How to use this calculator

Enter the child's current age, the expected yearly cost of college today, how much you have already saved, your monthly contribution and your expected rate of return. The calculator adds tuition inflation, projects the total cost when the child starts college and shows whether your savings will cover it.

If the result shows a gap, try a higher monthly amount or an earlier start. Even small monthly amounts add up over 15 years or more.

How 529 plans help

A 529 plan is a tax-advantaged account for education costs. Earnings grow free of federal tax, and withdrawals are tax-free when you use them for qualified education expenses such as tuition, fees, books, and room and board. Many states also give a state tax deduction for contributions.

Under current federal rules, a beneficiary can move up to $35,000 over their lifetime from a 529 plan to a Roth IRA if the account has been open at least 15 years, subject to the annual Roth IRA contribution limit. This reduces the risk of saving too much.

Saving as a grandparent

Grandparents can open a 529 plan for a grandchild or contribute to the parents' plan. Under the simplified FAFSA, distributions from a grandparent-owned 529 plan no longer count as student income, which makes this option more attractive than it was.

Ways to lower the total cost

Savings are only one part of the plan:

  • Start at a community college and transfer to a four-year school.
  • Compare net price, not list price. Many private schools give large grants.
  • Apply for scholarships every year, not only in the first year.
  • Look at in-state public schools and programs with strong job outcomes.

Frequently asked questions

What tuition inflation rate should I use?

College costs have often risen faster than general inflation. Many families test a rate between 3% and 5% a year to see a range of outcomes.

Do I need to save the full cost of college?

Not always. Many families aim to save part of the cost and cover the rest with current income, grants, scholarships and the student's own work. Saving part is much better than saving nothing.

What if my child does not go to college?

You can change the 529 beneficiary to another family member, use the money for trade school or apprenticeship programs that qualify, or move part of it to a Roth IRA under the rules above. Non-qualified withdrawals pay income tax plus a 10% penalty on the earnings.

Keep reading

This calculator gives estimates for education only. It is not personalized financial, tax or legal advice. Check your numbers with a qualified professional before you make a decision.