Student Loans

What would a 529 be worth by the time they start?

Contributions and growth over the years you have. No grant and no tax treatment, because a 529's tax value is set state by state and this site has not transcribed those.

Value when they start$79,328.11

$48,000.00 contributed and $31,328.11 of growth.

  • $48,000.00You contribute
  • $31,328.11Growth
  • $79,328.11Total

This is growth only, and that is a real limitation

Most of what makes a 529 worth using rather than an ordinary investment account is tax treatment, and none of it is modelled here. Earnings grow free of federal tax and come out free of federal tax when spent on qualified education expenses. On top of that, most states with an income tax offer a deduction or a credit for contributions, and the amount differs in every one of them.

This site has not transcribed those state rules, so it does not show them. Adding a plausible-looking tax benefit would be inventing a figure, and the figure would be wrong in most states. Check your own state's plan for what it actually offers.

Contribution limits are not shown for the same reason. There is no federal annual limit, states set aggregate caps that vary widely, and large contributions interact with federal gift tax rules this site has not checked.

What this page deliberately does not tell you

A 529's value is mostly tax treatment, and tax treatment is set state by state. Earnings grow and come out free of federal tax when spent on qualified education expenses, and most states with an income tax add a deduction or credit for contributions on top. The amount is different in every one of them.

This site has not transcribed those rules, so it does not show them. A plausible-looking tax benefit would be a number nobody published, and it would be wrong in most states.

Compared with the Canadian equivalent

An RESP pays a matching grant in cash, which a 529 does not. A 529 has no federal contribution limit, where an RESP is capped at $50,000 per child. They solve the same problem differently, and neither maps onto the other.

The rules behind this calculator were last checked on .

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