529 College Savings Calculator

Frequently Asked Questions

What is a 529 plan?

A 529 is a tax-advantaged savings account designed for education expenses. Contributions are made with after-tax dollars, but earnings grow tax-free and withdrawals are tax-free when used for qualified education expenses, including tuition, room and board, books, and K–12 expenses up to $10,000 per year.

What return rate should I use for a 529?

Most 529 plans offer age-based portfolios that shift from stocks to bonds as the child approaches college age. For a child with 10+ years until college, a 6–7% annual return is a reasonable planning assumption for an equity-heavy allocation. For 5 years or less, use 3–4% to reflect a more conservative portfolio.

What if I save more than needed?

Unused 529 funds have several options. You can change the beneficiary to another family member, keep the account for graduate school, withdraw for non-education expenses (subject to taxes and a 10% penalty on earnings only), or roll up to $35,000 into a Roth IRA for the beneficiary (per SECURE 2.0, subject to conditions).

Can grandparents contribute to a 529?

Yes. Anyone can contribute to a 529. Grandparent contributions were previously reported on the FAFSA, potentially reducing aid eligibility, but new FAFSA rules effective 2024–25 no longer count grandparent 529 distributions as student income.

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