529 Plan Growth & Withdrawal Calculator
A 529 plan grows tax-deferred and withdrawals are tax-free for qualified education expenses — one of the best risk-adjusted savings vehicles for education costs. But the rules around contributions, qualified expenses, and what happens to leftover funds are nuanced. This calculator projects your 529 balance at enrollment, models tax-free withdrawal sequencing against tuition bills, and shows the new Roth IRA rollover option for unused funds under SECURE Act 2.0.
growth that escapes federal tax if qualified
at 15% cap-gains (estimate)
over the contribution years (your input)
after all withdrawals — up to $0 eligible for a Roth IRA rollover (SECURE 2.0 $35,000 lifetime cap)
The line climbs through the accumulation years to the enrollment balance, then draws down as each year’s qualified expenses are withdrawn. The dashed marker is the enrollment boundary.
| Year | Start | Contributions | Growth | End balance |
|---|---|---|---|---|
| 1 | $10,000 | +$3,600 | +$717 | $14,317 |
| 2 | $14,317 | +$3,600 | +$984 | $18,901 |
| 3 | $18,901 | +$3,600 | +$1,266 | $23,768 |
| 4 | $23,768 | +$3,600 | +$1,567 | $28,934 |
| 5 | $28,934 | +$3,600 | +$1,885 | $34,420 |
| 6 | $34,420 | +$3,600 | +$2,224 | $40,243 |
| 7 | $40,243 | +$3,600 | +$2,583 | $46,426 |
| 8 | $46,426 | +$3,600 | +$2,964 | $52,990 |
| 9 | $52,990 | +$3,600 | +$3,369 | $59,959 |
| 10 | $59,959 | +$3,600 | +$3,799 | $67,358 |
| Year | Start | Expenses | Withdrawal | End balance | Shortfall |
|---|---|---|---|---|---|
| 1 | $67,358 | $28,000 | −$28,000 | $43,399 | — |
| 2 | $43,399 | $29,400 | −$29,400 | $16,603 | — |
| 3 | $16,603 | $30,870 | −$17,599 | $0 | $13,271 |
| 4 | $0 | $32,414 | −$0 | $0 | $32,414 |
View the TypeScript implementation on GitHub: packages/calc/src/529-growth-calculator.ts · view tests
What this means
A 529 plan does two things at once: it lets education savings compound without the annual drag of taxes on dividends and gains, and it lets qualified withdrawals come out federally tax-free. The longer the runway, the larger the slice of the final balance that is earningsrather than contributions — and that earnings slice is precisely the part the IRS would have taxed in an ordinary brokerage account. This calculator separates the two phases so you can see both the build-up and the spend-down on one timeline.
The part people miss is the withdrawal side. It is not enough for the balance to look big at enrollment; it has to survive four (or more) years of bills that keep rising. Because college costs inflate faster than most budgets assume, a plan that looks fully funded on a single year’s tuition can still run short by junior year. The withdrawal schedule here makes that risk legible before it becomes a surprise.
In my experience, the most useful output is often the leftoverline. Families that oversave, or whose student lands a scholarship, used to face an awkward choice between a penalty and leaving money parked forever. I’ve found that the SECURE 2.0 Roth rollover changes that conversation entirely — up to $35,000of unused funds can become retirement savings for the beneficiary. I’ve seen that single fact turn “what if we save too much?” from a real worry into a non-issue, which tends to make people comfortable funding the plan properly in the first place.
Worked example
Take the example preset: $10,000 in the account today, $300/month added for 10 years at an assumed 6% return. Each year the prior balance and twelve $300 deposits compound at 0.5% per month; the balance climbs from $10,000 to roughly $14,317 after year one and reaches about $67,358 by enrollment. Of that, $46,000 is money you put in and roughly $21,358 is tax-free earnings — earnings that, at a 15% capital-gains rate, would have cost about $3,204 in a taxable account.
Now the spend-down. With $28,000 of year-one expenses growing 5%a year, the account grows once more to about $71,400 at the start of year one, pays the $28,000 bill, and carries the rest forward. By the third enrollment year the rising bills outpace what is left — the schedule flags the shortfallso you can see exactly when the money runs out. That is the whole point: the headline balance looked healthy, but four years of 5% inflation on a $28,000 base is the part that decides whether the plan actually covers the degree. Bump the monthly contribution or start a year or two sooner and watch the shortfall close — or, in a better-funded plan, watch the leftover line appear and up to $35,000 of it become Roth-eligible.
Frequently asked questions
The information and tools on this website are for general educational purposes only and do not constitute financial, investment, legal, or tax advice. Consult a licensed professional for decisions specific to your situation.