What is College Savings Calculator?
Calculates the required monthly contribution to reach a tuition goal, accounting for time horizon and compound interest.
How it Works
Uses the Future Value of Annuity formula, solved for payment (PMT).
Also accounts for tuition inflation if specified.
Goal = Future Cost. Calculates Monthly Pmt to reach Goal.
Step-by-Step Guide
- 1 Child's Age
- Enter current age.
- 2 Total Cost
- Estimate 4-year tuition.
- 3 Current Savings
- Amount already saved.
- 4 Result
- Monthly savings needed.
Example
Input: Age 5, $50k Goal
Result: $320/mo
FAQ
What is a 529 plan?
A tax-advantaged savings plan designed to encourage saving for future education costs.
Average tuition inflation?
Historically around 5-8%, higher than general inflation.
Does this include room/board?
You should factor that into the 'Total Cost' input.
Financial aid?
This calc assumes you pay full price; aid reduces the burden.
Investment return?
Usually estimated at 6-7% for long-term horizons.
Conclusion
Time is your best asset. Starting early allows compound interest to cover a significant portion of the cost. Using 529 plans can also provide tax advantages.