Model
Cost data & 529 reference

College savings —

Bucket balances vs. annual expenses

Cumulative contributions vs. cumulative expenses

Terminal disposition — where the surplus lands and what it's worth

Flexibility vs. tax efficiency — split comparison

Same total $/mo, varying % routed to 529 · nominal terminal values
The ◂ marker shows the active valuation basis (set by the "assume no penalty exits" toggle). Liquidation value = brokerage after LTCG + Roth-route net of CO basis recapture + remaining 529 cashed out non-qualified. Warehouse value = same, but remaining 529 kept at face via beneficiary changes / generational rolls inside CollegeInvest. "Accessible" = brokerage after-tax only — dollars spendable on anything, tomorrow, no strings. Under the no-penalty assumption the split choice is a pure trade between warehouse value and accessibility.

Per-child cost summary

Year-by-year projection

Contributions compound monthly · expenses at end of year · CO rebate credited to brokerage

Cost data & 529 reference

College Board — 2025-26 published averages

Public 4-yr in-state
Tuition & fees $11,950 + other $19,040
$30,990 / yr
+$1,080 vs 2024-25
Public 4-yr out-of-state
Tuition & fees $31,880 + other $19,040
$50,920 / yr
+$1,840 vs 2024-25
Private nonprofit 4-yr
Tuition & fees $45,000 + other $20,470
$65,470 / yr
+$2,480 vs 2024-25
"Other" = housing, food, books, supplies, transportation, personal expenses per College Board student budgets. Source: Trends in College Pricing and Student Aid 2025.

Education inflation — what the data actually shows

Recent nominal increases (2024-25 → 2025-26): public in-state +2.9%, public out-of-state +3.4%, private +4.0%. Against ~2.7% CPI that is roughly 0–1.4% real.

Last decade in real terms: average published tuition and fees declined in the public sectors and rose only ~2% cumulative at private four-years. The "college compounds at 5–6% forever" heuristic describes 1980s–2000s dynamics, not the current regime.

Suggested settings: 4% nominal education inflation (≈1% real at 3% CPI) central; 5% conservative stress; CPI-matching optimistic.

Sticker vs. net price

This model plans at sticker price — the conservative bound. Net tuition & fees after grant aid average ~$2,300 at public four-years and ~$16,910 at private four-years (2025 dollars, first-time full-time students including non-recipients). Merit-driven institutional discount rates at privates exceed 50% on average.

A sticker-price plan that exactly funds is overfunded in expectation. That asymmetry is the core argument for keeping part of the pool in the flexible bucket.

Financial aid parity

Parent-owned 529s and parent taxable brokerage are treated identically on the FAFSA — both parental assets assessed at a maximum 5.64% in the Student Aid Index. The 529-vs-brokerage split is therefore a pure tax/flexibility trade with no aid consequence. (Retirement accounts are excluded entirely; home equity is excluded on FAFSA but not CSS Profile schools.)

Colorado specifics (CollegeInvest)

Deduction
2026: up to $39,200 per beneficiary per joint return deducted from CO taxable income — worth 4.4% of every contributed dollar at the flat rate. Contributions to out-of-state plans don't qualify. Cap indexed to CO tuition costs going forward.
Recapture trap
Non-qualifying distributions trigger CO recapture of previously deducted contributions plus CO tax on the earnings addition. Critically, CO treats SECURE 2.0 529→Roth rollovers as non-qualifying — the federally clean escape route costs ~4.4% at the state level. K-12 tuition and student-loan repayment are also non-conforming in CO.
Net 529 edge
The 4.4% front-end rebate roughly pre-pays a decade of brokerage dividend drag. But it's clawed back on any non-qualified exit — so the deduction strengthens the case for 529 dollars you're confident get spent on school, and does nothing for the marginal overfunding dollar.

Overfunding escape routes (in priority order)

SECURE 2.0 → Roth
$35,000 lifetime per beneficiary, account open 15+ yrs, last-5-years' contributions excluded, annual transfer ≤ IRA limit, beneficiary needs earned income, no Roth income phase-out. Federally clean; CO recapture applies (see left).
Beneficiary change
Tax-free to a member of the family; warehouse for grandchildren (generation-skip needs gift/GST analysis). Preserves face value but keeps money inside the education wrapper.
Same-gen lateral
Excess moved between same-generation family members — gift-tax-invisible under current proposed regs; most powerful consolidation tool, highest regulatory exposure until finalized.
Scholarship offset
Withdraw up to scholarship amount penalty-free in the year received; earnings still taxed. Use in any merit-aid year — pairs naturally with sticker-price overfunding.
Eat the penalty
Earnings portion at ordinary + 10% + state (+ CO basis recapture). With earnings at ~50% of the account and a 24% bracket, the all-in exit haircut on the total is ~21% — bounded, not catastrophic. The disposition panel prices this live.

AOTC collision with the conversion window

The American Opportunity Tax Credit ($2,500/yr per student, first 4 years) requires paying ≥$4,000 of tuition from non-529 dollars — but phases out at $160–180K MAGI (MFJ), a threshold frozen in law. College years that overlap a Roth-conversion window running MAGI to the 24% bracket ceiling forfeit AOTC entirely. If conversion-window MAGI is a given, there's no reason to reserve brokerage dollars for tuition to capture it.

Model conventions

Engine nominal; display toggle deflates by CPI. Both buckets grow at the nominal return; brokerage return is reduced by the annual tax-drag input (dividend/distribution taxes). Basis is tracked in both buckets: contributions add basis, withdrawals consume it pro-rata.

Spending: 529-first is the default — qualified 529 withdrawals are tax-free, and every 529 dollar spent on school is a flexible dollar preserved. Brokerage sales are grossed up for LTCG on the embedded-gain fraction at sale time.

CO rebate: modeled as a cash inflow of state-rate × 529 contributions, credited to the brokerage bucket each year (that's where a tax refund actually lands).

Solvers: required monthly holds the chosen split and finds the contribution such that combined balance never dips below zero. Not modeled: aid, scholarship probability, AOTC, per-plan fees.