When I defined what Financial Independence means to me (here), $80000 dollars in a college fund for my kid seemed good to me….how I came up with that number is listed here. I did not have any notion of how to get there apart from creating a 529 fund and regularly depositing money into it.

The next question for me now is: how long before I get $80000 in the 529 College fund? This post will talk about how to come up with a time estimate.

Savings Calculator

There are two nice calculators that we can use to estimate how many years it will take to accumulate a certain sum of money, if we know the monthly investment that one is ready to invest.

1. Savings Calculator from FINRA
2. Bankrate.com’s Savings Calculator

The college fund for my kid is invested in a Vanguard 529 plan. I am going to assume that this fund returns about 3% average over the next 9 years. This is when my kid will be ready to enter college. I am going to use the Savings Calculators listed above to estimate when the 529 plan will reach a target amount of $80000.

Parameters for the Calculator

The input that the calculator needs is as follows:

1. Initial Savings Balance: $25,310
2. Deposit Interval: Monthly
3. Deposit Amount per interval: $400
4. Number of Deposits: 108 (12 months * 9 years = 108)
5. Annual Return: 3.0% and 5% (conservative and average growth rate for the 529 Plan)
6. Inflation Rate: 3.0%

Now, lets calculate the time required to reach $80000 at two growth rates: 3% and 5%.

Case 1: Calculator Results at 3% Return

By inputting the above parameters to the calculator, here are the results after 104 months of investing $400 at appx 3% average rate of return per year.

• Ending Balance: $82,576
• Inflation Adjusted Balance: $59,030

No   Period        Deposit      Balance           Inflation Adjusted Balance
1     Jan-2015  $400.00     $25,773.41     $25,693.43
13   Jan-2016  $400.00     $31,424.26     $30,179.91
25   Jan-2017  $400.00     $37,244.63     $34,460.31
37   Jan-2018  $400.00     $43,239.62     $38,542.51
49   Jan-2019  $400.00     $49,414.46     $42,434.08
61   Jan-2020  $400.00     $55,774.54     $46,142.32
73   Jan-2021  $400.00     $62,325.42     $49,674.25
85   Jan-2022  $400.00     $69,072.83     $53,036.64
97   Jan-2023  $400.00     $76,022.66     $56,236.01
98   Feb-2023  $400.00    $76,611.14     $56,495.46
99   Mar-2023  $400.00    $77,201.07     $56,753.83
100 Apr-2023  $400.00     $77,792.46     $57,011.12
101 May-2023 $400.00     $78,385.30     $57,267.33
102 Jun-2023  $400.00     $78,979.61     $57,522.46
103 Jul-2023   $400.00     $79,575.38     $57,776.53
104 Aug-2023 $400.00     $80,172.62     $58,029.53

Case 2: Calculator Results at 5% Return

By inputting the above parameters to the calculator, here are the results after 90 months of investing $400 at appx 5% average rate of return per year.

• Ending Balance: $80,050
• Inflation Adjusted Balance: $60518

No Period         Deposit       Balance          Inflation Adjusted Balance
1   Jan-2015     $400.00     $25,814.75     $25,734.64
13 Jan-2016     $400.00     $32,034.51     $30,766.00
25 Jan-2017     $400.00     $38,565.27     $35,682.22
37 Jan-2018     $400.00     $45,422.57     $40,488.33
49 Jan-2019     $400.00     $52,622.72     $45,189.15
61 Jan-2020     $400.00     $60,182.89     $49,789.36
73 Jan-2021     $400.00     $68,121.07     $54,293.46
85 Jan-2022     $400.00     $76,456.15     $58,705.82
………………………………………………………
90 Jun-2022     $400.00     $80,050.93     $60,518.23

Conclusion

From the calculator’s results above, we can see the following results for investing $400 per month in a 529 plan.

• At 3% annual return, it takes 104 months (approximately 9 years) of investing.
• At 5% annual return, it takes 90 months (approximately 7.5 years) of investing.

Wish me luck that I can get this done within 7.5 years!!