New York 529: am I saving enough for college?
College costs rise faster than almost anything else you'll save for, so a 529 plan works best when you start early and let tax-free growth do the heavy lifting — and New York savers should also know the NY state tax rules below. This calculator projects your plan balance to the year your child starts school, compares it to the future cost of four years, and tells you the monthly contribution that fully funds the goal. Everything runs in your browser — nothing is uploaded.
Assumptions
- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.
- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.
- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.
- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.
An estimate for planning, not financial advice. Investment returns are never guaranteed, and college costs vary enormously between a public in-state school and a private university. Treat the funding percentage as a directional target, not a promise.
What is a 529 plan?
A 529 plan is a state-sponsored, tax-advantaged account for education savings. You contribute after-tax dollars, the money grows tax-free, and withdrawals are tax-free when used for qualified education expenses — tuition, fees, room and board, books, and even up to $10,000 a year of K-12 tuition. Many states also offer a state income-tax deduction or credit for contributions.
New York 529 tax deduction
New York taxpayers can deduct up to $5,000 per year ($10,000 married filing jointly) of contributions to New York's 529 plans — the Direct Plan or the Advisor-Guided Plan — from New York state taxable income. At a typical 6% state rate, a couple contributing $10,000 saves roughly $600 a year in state tax on top of the federal tax-free growth.
Two New York quirks to know: the deduction only applies to New York's own plans (contributions to another state's 529 don't count), and New York treats K-12 tuition withdrawals as non-qualified at the state level, so using the account for private school can trigger recapture of prior deductions.
529 tax benefits in other states: CA · NJ · VA · OH · IL · FL — or use the general 529 calculator.
How this calculator projects your plan
It runs two projections. First it grows your current balance and monthly contributions at your expected return until the year college begins, giving your projected balance. Second, it inflates today's annual cost by your college-inflation rate to each future school year and adds them up, giving the projected total cost. Your funding percentage is simply the first divided by the second.
Why college inflation matters so much
College costs have historically risen faster than general inflation — often 4–6% a year. A $25,000 annual cost today becomes roughly $52,000 in fifteen years at 5% inflation, and you'll pay that for four straight years. That's why starting early is decisive: the same monthly contribution invested when your child is a toddler has fifteen-plus years to compound, versus just a few if you wait.
You don't have to fund 100%
Fully funding college from a 529 is a stretch for many families, and that's fine. Financial aid, scholarships, a student's own earnings, and current income during the college years all help. A common strategy is to target a realistic share — say half or two-thirds — and cover the rest from cash flow and aid. Use the required-contribution figure as your ceiling, then aim for a share that fits your budget.
Frequently asked questions
Is there a New York state tax deduction for 529 contributions?
Yes — up to $5,000 per year for single filers and $10,000 for married couples filing jointly, but only for contributions to New York's own 529 plans (the Direct Plan or Advisor-Guided Plan). Contributions to another state's plan get no New York deduction.
Do I have to use New York's 529 plan?
No — you can open any state's 529 plan. But because the state deduction only applies to New York's plans, and NY's Direct Plan has low index-fund fees, most New York residents come out ahead using the in-state plan.
How much should I save in a 529 plan?
Enough that your projected balance covers the share of future college costs you want to fund — many families aim for a third to two-thirds, with aid and current income covering the rest. This calculator shows the monthly contribution that would fully fund your chosen number of years, which you can scale down to a target you're comfortable with.
What return should I assume for a 529?
It depends on your investments and time horizon. Age-based 529 portfolios start stock-heavy and shift toward bonds as college nears, so a long-dated account might assume 6–7% while one close to enrollment assumes less. A moderate 5–6% is a reasonable planning figure; lower it as college approaches.
What college cost inflation rate should I use?
College costs have historically risen faster than general inflation — commonly 4% to 6% a year, though recent increases have moderated at many schools. Using around 5% is a sensible middle-ground assumption; a pricey private school may warrant a higher rate.
What happens to leftover 529 money?
Unused funds can be kept for graduate school, changed to another eligible family member as beneficiary, or, under current rules, rolled over to a Roth IRA for the beneficiary up to a lifetime limit (subject to conditions). Non-qualified withdrawals are taxed on the earnings and hit with a 10% penalty, so it pays not to dramatically over-fund.
Does a 529 hurt financial aid?
A parent-owned 529 is treated as a parental asset on the FAFSA, which counts at a low rate (up to about 5.64%), so its impact on aid is modest — far smaller than the benefit of the tax-free growth for most families. Qualified withdrawals no longer count as student income under current rules.
Fit college into your whole plan
Free, private, and running entirely in your browser. Model 529 savings alongside retirement, taxes, and everything else — and track plan vs. actual — no account required.