A 529 balance depends mostly on two things: how early you start and the return you keep after fees. At 6% a year, $5,000 plus $300 a month from birth reaches $130,890 by 18.
Start the same plan at age eight and you'd have $58,261. A 529 is an education savings program run by a state or a state agency. According to the IRS, its earnings aren't taxed when withdrawals pay for qualified education costs.
One return, compounded every month
P is your opening deposit and M your monthly contribution. Each deposit lands at the end of its month and earns the same rate from then on. So the opening deposit compounds for the whole term, while the final deposit earns nothing.
The calculator has no fields for fees, taxes, state deductions or inflation. You allow for those through the inputs.
Starting at birth beats saving more later
Here's the same plan, $5,000 up front and $300 a month at 6%, started at three ages:
| Start at age | Years of saving | Monthly deposits | Growth | Balance at 18 |
|---|---|---|---|---|
| 0 | 18 yr | $64,800 | $61,090 | $130,890 |
| 4 | 14 yr | $50,400 | $34,849 | $90,249 |
| 8 | 10 yr | $36,000 | $17,261 | $58,261 |
Waiting until eight costs $72,629 by 18. Only $28,800 of that gap is money you didn't pay in. The other $43,829 is growth the early deposits would have earned.
Catching up takes much bigger deposits. Each of these, with the same $5,000 up front, reaches $130,890 by 18:
| Start at age | Years to save | Monthly amount needed | Monthly deposits in total |
|---|---|---|---|
| 4 | 14 yr | $454.94 | $76,430 |
| 8 | 10 yr | $743.19 | $89,182 |
Starting at eight, you'd pay in $24,382 more of your own money. The savings goal calculator solves this for any target.
Enter the return you keep after fees
Subtract the plan's yearly costs from the return you expect. According to the SEC, education savings plans may charge enrollment, account maintenance, program management and asset management fees. Buying through a broker typically adds sales loads and distribution fees.
| Yearly fees | Return you keep | Growth | Balance at 18 |
|---|---|---|---|
| None | 6% | $61,090 | $130,890 |
| 0.5% a year | 5.5% | $53,927 | $123,727 |
| 1% a year | 5% | $47,236 | $117,036 |
A 1% yearly fee takes $13,854 off the balance at 18, almost four years of $300 deposits. The investment fee calculator shows what a fee rate costs in dollars each year.
The SEC notes that states don't guarantee these plans and that you can lose money in one. Age-based portfolios, it adds, typically shift into more conservative investments as college nears. The calculator applies one rate to every year, so run a lower rate beside the one you hope for.
What you can spend it on without federal tax
In 2026, qualified expenses cover far more than college, as the IRS and SEC describe them:
- College and credential programs: tuition and certain other costs of post-secondary education, including recognized post-secondary credential programs.
- Elementary and secondary school: up to $20,000 a year from all of a beneficiary's 529s. The limit was $10,000 before December 31, 2025. Tuition, books, tutoring, test fees and dual enrollment count.
- Apprenticeships: fees, books, supplies and equipment for a program registered and certified with the Secretary of Labor.
- Student loans: principal or interest for the beneficiary or a sibling, up to $10,000 per person over a lifetime.
Your state may differ. For 2025, California doesn't conform on elementary and secondary school expenses or credential programs. Residents add back what was excluded from federal income.
What a withdrawal for anything else costs
Take money out for other purposes, and the earnings part of the withdrawal becomes taxable income. On top of federal and state income tax, the SEC says, comes an additional 10% federal tax on those earnings.
Say the whole $130,890 went on a car. The $61,090 of growth would be taxed as income, plus $6,109 in additional tax. The tax falls on the growth, not on the $69,800 you paid in. The IRS says the 10% may apply to part or all of the taxable amount. Form 5329 has the details.
If your child doesn't need all of it
The money isn't stuck. You can switch the beneficiary tax-free to a family member of the old one. For the IRS, family includes the beneficiary's spouse, children, siblings, parents, grandparents, stepparents and in-laws. Nieces, nephews, aunts, uncles and first cousins count too.
Since 2024, leftover money can also go to the beneficiary's own Roth IRA. For the rollover to be tax-free, the IRS lists four conditions:
- it moves by direct trustee-to-trustee transfer;
- it stays within the Roth IRA's annual contribution limit and a $35,000 lifetime cap;
- the 529 has been open for at least 15 years;
- it doesn't exceed contributions made more than five years earlier, plus their earnings.
California's 2025 rules don't conform: the rollover counts as state income, plus a 2½% additional tax. The Roth IRA calculator projects what a rolled-over sum could grow to by retirement.
Your state's tax break isn't in the result
Contributions aren't deductible on your federal return, the IRS says. Many states offer a deduction or matching grant, the SEC notes, sometimes only for their own plan.
If you'll reinvest the yearly tax saving, add a twelfth of it to your monthly contribution. Don't pick a plan on the tax break alone. The SEC points out that a cheaper out-of-state plan may outweigh an in-state tax benefit.
The balance is in future dollars
The result is in future dollars, which buy less if prices keep rising. At today's prices, $130,890 in 18 years is worth:
| Inflation | Value at today's prices |
|---|---|
| 2% a year | $91,644 |
| 3% a year | $76,884 |
| 4% a year | $64,611 |
At 3% inflation, it buys what $76,884 buys now. Compare that figure with your target school's current costs. The inflation calculator runs the other way, from today's price to a future one.
Sources
- IRS, Topic no. 313, Qualified tuition programs (QTPs) (reviewed September 24, 2026)
- SEC Investor.gov, An Introduction to 529 Plans (January 28, 2026)
- IRS, Form 1099-Q, Instructions for Recipient (Rev. April 2025)
- IRS, Instructions for Form 1099-Q (April 2025)
- California Franchise Tax Board, 2025 Instructions for Schedule CA (540)