529 College Savings

The calculator has three inputs. Everything else, including the return, college inflation, and today's cost of college, is fixed (see Assumptions & Sources below).

1. Child's Current Age (0 to 17). Drag the slider to your child's age today. The calculator assumes college starts at 18, so the number of years your money has to grow is 18 minus this age. A newborn gets 18 years of growth; a 17-year-old gets one. If you are planning for a child who is not born yet, use 0 to see the best case.

2. Current 529 Balance. Enter today's market value of the 529 money set aside for this one child. Include accounts owned by grandparents only if you are confident that money will go to this child's college. You can also use this box to test a lump sum: add a planned one-time gift (for example, a 5-year gift tax election) to the current balance to see what it does if it went in today.

3. Monthly Contribution. Enter what you plan to add each month, every month, until age 18. The calculator multiplies it by 12 and treats it as one deposit at the end of each year. That makes it slightly conservative compared with real monthly deposits, which start growing sooner. If your contribution will rise after training, run the calculator twice (now and at your expected attending contribution) to bracket the answer.

Reading the results. “Projected Savings at Age 18” is the account value when your child turns 18. “Est. 4-Year Cost” is four years at the inflated freshman-year price. The badge shows the projected savings as a percentage of that cost with the dollar shortfall, or “Fully Funded!” once savings cover it. For more than one child, run the calculator once per child.

You start late. Many physicians have their first child during residency or fellowship, when contributions are small. Time is the biggest input in this calculator: with the same $500 a month, a child who starts at birth with nothing ends up 64% funded, while an 8-year-old with $20,000 already saved ends up 58% funded. The years you lose in training have to be made up with larger contributions later.

Your income likely limits need-based aid. A high attending income usually reduces or eliminates need-based financial aid, so many physician families should plan to pay the full sticker price. That makes tax-free growth on the money you save more valuable, and it makes the target in this calculator closer to what you will actually pay.

Taxes and gifting. Growth in a 529 is tax-free when used for qualified education expenses, and many states add a deduction or credit for contributions. 529 contributions also count as completed gifts, so they can move money out of a large estate; the physician estate planning guide covers the annual exclusion, 5-year front-loading, and direct tuition payments in detail.

Let t = 18 − child's age, r = 6% annual return, and i = 5% annual college inflation.

Growth of your current balance: Balance at 18 = P × (1 + r)^t, where P is the current 529 balance. Growth compounds once a year.

Growth of your contributions: Contributions at 18 = (Monthly × 12) × [((1 + r)^t − 1) / r]. This is the future value of an ordinary annuity: one deposit of 12 months' contributions at the end of each year.

Projected savings: FV = Balance at 18 + Contributions at 18.

College cost: Cost per year = $30,000 × (1 + i)^t, and 4-year cost = Cost per year × 4. The same freshman-year price is used for all four years.

Funded status: Funded % = FV / 4-year cost × 100, rounded down, so a plan that is even a dollar short never shows 100%. Once FV reaches the 4-year cost, the badge shows “Fully Funded!” instead. The dollar shortfall shown next to the percentage is the 4-year cost minus FV.

The calculator does not model taxes, fees, state deductions, financial aid, or investment growth after age 18.

• Pearl: Check your state's 529 deduction or credit before picking a plan. Some states give it only for contributions to the in-state plan, others for any state's plan, and some have no income tax deduction at all.
• Pearl: Starting early beats contributing more later. Starting at birth with nothing saved, about $779 a month is enough to show fully funded. Waiting until age 8, even with $20,000 already saved, takes about $1,010 a month under the same assumptions.
• Pearl: Front-loading with the 5-year gift tax election gives the money the longest possible time to compound and removes it from your estate. It works best when you have already maxed your retirement accounts, including a backdoor Roth IRA.
• Pitfall: Funding college ahead of retirement. Your child can borrow for school; you cannot borrow for retirement. The attending playbook puts 529 contributions after your own retirement savings.
• Pitfall: Overfunding. If your child gets a full ride or skips college, the 529-to-Roth rollover is capped at $35,000 lifetime, and other non-qualified withdrawals pay income tax plus a 10% additional tax on earnings. Changing the beneficiary to a sibling or other family member avoids both.
• Pitfall: Treating “Fully Funded” as a guarantee. The target here is four years at $30,000 today, inflated at 5%. A private school, graduate school, or lower returns can leave a gap even when the badge is green.