# How long does it take to accumulate \$80000 in a 529 College fund?

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.

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

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

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.