College Savings Calculator
Work out how much to save each month to cover a child's future education costs.
About the College Savings Calculator
Enter your child's age, the age college starts, today's total cost of the course, education cost inflation, what you've saved and the return you expect. The calculator projects the future cost and the monthly saving needed, with a chart of savings against cost.
Education costs often rise faster than general inflation, so today's price is projected forward. The monthly saving then needs to grow, with investment returns, to that future cost.
The formula
Future cost = cost today × (1 + inflation)ⁿ; PMT from the future value of an annuity
Worked example
A 5-year-old, college at 18, costing 120,000 today, 5% cost inflation, 10,000 saved, 6% return
- Future cost in 13 years: about 226,278
- The 10,000 already saved grows to about 21,772
- Save about 869 a month for the rest
Questions people ask
What inflation should I use?
Education costs have historically risen faster than general inflation; use a cautious higher figure.
Which account should I use?
In the US a 529 plan grows tax-free for qualified costs; in India, options include PPF, Sukanya Samriddhi (for daughters) and equity mutual funds.
Should I shift to safer investments as college nears?
Many plans do, so a market fall just before fees are due can't derail the plan.