College Planning
How much to save — 529 vs. taxable
Solve for the monthly payment needed to fund college — either to cover the full 4-year cost (estimated for in-state or out-of-state and inflated each year) or to reach a target amount by the time your child starts school. Compared side by side for a 529 plan (tax-deferred growth, tax-free qualified withdrawals) and a taxable account (growth taxed each year, plus an advisory management fee). The sales load applies to the 529 only; each account has its own expense ratio, and the taxable account also bears a management fee and is taxed on its growth each year. The fund keeps growing through the four college years while each year's bill is withdrawn. All math runs in your browser; nothing is saved or transmitted.
How it works
We find the level monthly deposit that grows — together with your one-time first investment — to fund your goal. For Cover 4-year college, we estimate each college year's cost (today's dollars inflated at the college-inflation rate) and solve so the balance at college start covers all four withdrawals, depleting to zero after senior year — the money invested for later years keeps compounding while earlier years are paid. For Reach a target amount, we solve for a single lump sum by college start. For Project my contribution, we skip solving — you enter what you'll save (monthly or yearly), we project the balance each vehicle reaches by college start, then pay the projected college bills and show how much is left over (or how far it falls short). Any leftover can keep growing until a chosen age; a 529's non-qualified leftover first pays income tax + a 10% penalty on its earnings, then continues as a taxable account. The two vehicles differ only in how the return is reduced:
- 529 plan — return = growth rate − expense ratio. Growth is tax-deferred and withdrawals are tax-free when used for qualified education, so there is no annual tax drag and no management fee. The sales load and expense ratio apply here.
- Taxable account — return = growth rate − its own expense ratio − management fee, and that return is taxed every year at your bracket (multiplied by 1 − tax rate). The sales load does not apply — the full contribution is invested. (Each account has a separately-entered expense ratio.)
The sales load is a front-end load on the 529 only: on every dollar you put into it — the first investment and each monthly payment — only (1 − load) is actually invested; the rest is a one-time cost. The taxable account has no load, so the full contribution goes to work.
Deposits are modeled monthly (annuity-due — at the start of each month); the first investment is a lump sum today. Because the 529 keeps more of its return, it generally requires a lower monthly payment to reach the same target.
Required monthly payment
529 plan
per month
Taxable account
per month
Extra with taxable
per month
Projected 4-yr cost
Projected college cost
| College year | Child's age | Cost (inflated) |
|---|
Side by side
both fund the goal| Metric | 529 plan | Taxable |
|---|
Balance by age
each at its own paymentYear-by-year ledger
Each year's contributions (the first row includes your one-time first investment), the sales load skimmed off the top, any college withdrawal, and how the running balance grows — decomposed into gross growth, the expense ratio, the management fee and tax. Gross growth − expense ratio − management fee − tax = net growth. The balance climbs through the saving years, then the college years (gold-shaded) each withdraw that year's inflated cost. In project mode any leftover then keeps growing: a 529's leftover stays tax-free (green-shaded “grow” rows) until the last child finishes college, then pays income tax + a 10% penalty in the Tax column and continues as a taxable account (navy-shaded rows); a taxable leftover simply keeps growing as taxable. The sales load applies to the 529 only; each account has its own expense ratio; the management fee and investment tax apply to the taxable account (and post-college taxable growth).
| Age | Contributions | Sales load | Net after load | Withdrawal | Gross growth | Expense ratio | Mgmt fee | Tax | Net growth | End balance |
|---|
A workbook with two sheets — one for the taxable account, one for the 529 plan — with the full year-by-year ledger.
A branded PDF summary — the required monthly payments, side-by-side detail, growth chart, and your inputs.