Comprehensive Guide
Learn more in our Planning Guide.
How it works
College costs compound twice: tuition inflates from today's sticker price, then the inflated total must be earned by an account compounding at your return. The engine projects today's annual cost forward at the tuition-inflation rate, multiplies by the years of college to get the future total, then solves the monthly contribution a 529-style account needs at the investment return to reach it by move-in day. The two rates fight each other, and the outcome is usually a shock: a child starting in 10 years at today's $30,000-a-year school (5% tuition inflation) faces roughly $195,000 for four years, needing about $1,180 per month at a 6% return. Start early and the same total costs a fraction of that monthly number — the engine's years input is the whole game. Tuition inflation above CPI is a planning default, not a guarantee: public schools inflate slower than private, and scholarships, grants and in-state rates change the effective number.Formula
Future cost = current cost x (1 + inflation)^years x years in college | Monthly = solve compound-growth schedule
Tips
- A 529's tax-free growth beats a taxable account for the same goal — use it.
- Start with any amount: $100 a month at age 5 beats $500 a month at age 15, every time.
- Grandparents can contribute to a 529 — check how gifts are treated in your state's plan.
- The 5% tuition inflation default is the honest planning number; use the school's actual history if you have it.
Frequently asked questions
How much should I save for college?
Target 50-100% of the future cost of the school type you realistically expect — community college first, then transfer, is a legitimate plan that halves the number. This calculator projects the future cost from today's sticker and your inflation assumption, so the monthly target is personal, not generic.
What is the best account for college savings?
A 529 plan: contributions grow tax-free and withdrawals for qualified education expenses are untaxed, and many states add a tax deduction on contributions. Coverdell accounts and custodial (UTMA) accounts are alternatives with trade-offs — 529s dominate for most families.
How fast does tuition inflate?
Historically 5-7% at private schools and 3-5% at public — persistently above general inflation. That gap is why a $30,000 school today is a $48,000 school in ten years, and why savings plans built on CPI miss the target.
What if my child doesn't go to college?
529 funds can be redirected to another family member, used for some non-college education costs, or withdrawn with taxes and a 10% penalty on the earnings portion only. The plan is flexible enough that the 'what if' rarely justifies not saving.