See what they actually inherit at 18.
Plug in a monthly contribution, return assumption, and the state's age of majority. See 529 and UTMA balances side by side at the handoff, plus the what-happens-at-the-handoff trade-off card on control, access, tax, and financial-aid impact. Education only, not advice on which account to choose.
Used to label the timeline; the calculation runs from age 0 to handoff.
Same amount funds both columns
Long-run average before fees and taxes
Used to estimate annual taxable dividends in the UTMA path
Applies to UTMA dividends above the 2026 $2,700 threshold
20 bps = 0.20% annual fee, applied to both columns
State of residence sets this, often 18 or 21
Education only. Returns are assumptions, not predictions. Actual results vary with market behavior, fees, dividend mix, state tax, and realized capital gains. This calculator does not include state tax effects, realized gains from rebalancing, or any specific state's 529 plan deduction or credit.
The UTMA path projects to $208,458 at age 18, after an estimated $2,075 of kiddie-tax drag along the way.
Each month, grow the prior balance by one-twelfth of the net return, then add the month's contribution. Same math for both columns.
Net return = gross return - expense ratio. New balance = previous * (1 + net return / 12) + $500 monthly
Over 18 years that totals $108,000 contributed.
For the UTMA, estimate annual dividends from the entered yield, then find the slice above the 2026 parents'-rate threshold.
Dividends above the $2,700 threshold are taxed at the parents' marginal rate (24%).
2026 thresholds from lib/referenceData2026.ts (IRS Rev. Proc. 2025-32 Sec. 4.02). The middle band ($1,350 to $2,700) is treated as 0% to stay conservative.
Subtract each year's tax drag from the UTMA balance. The 529 grows federal-tax-free for qualified education.
529 at age 18 = $210,797 | UTMA after $2,075 total drag = $208,458
Assumptions
- Both columns receive the same monthly contribution and the same gross annual return.
- The fee (expense ratio) is applied evenly to both columns.
- The UTMA dividend yield is treated as fully taxable in the year received; qualified vs ordinary distinction is ignored.
- The 2026 kiddie-tax thresholds ($1,350 standard-deduction floor and $2,700 parents'-rate threshold) come from IRS Revenue Procedure 2025-32 Section 4.02, pulled from lib/referenceData2026.ts.
- The middle band ($1,350 to $2,700) is treated as taxed at 0% to stay conservative on the UTMA balance; in reality it is taxed at the child's marginal rate, which slightly understates the drag for high-balance UTMAs.
- The 529 column assumes the eventual withdrawal will be for qualified education expenses (federal-tax-free growth).
Limitations
- No state income tax effects. State treatment of 529 contributions (a deduction or credit in many states) is omitted.
- No realized capital gains from rebalancing. A buy-and-hold portfolio rarely realizes gains; a managed portfolio does.
- No financial aid math beyond the trade-off card's general note. Specific Student Aid Index calculations require household-specific inputs.
- No tax bracket changes over 18 years. Real brackets shift with inflation and legislation.
- No specific 529 plan fees or share class. Compare actual plans before opening one.
- It is not a recommendation to choose 529 over UTMA, or UTMA over 529.
- It is not a forecast. Returns are assumptions, not predictions. Real returns vary year to year.
- It is not personalized tax or financial-aid advice. State, bracket, and family situation matter; talk to a CFP or CPA for the household-specific call.
- It is not a guarantee that the entered return will be achieved. Past performance does not predict future results.
Common questions.
How does this calculator compare a 529 and a UTMA?
Both columns are funded with the same monthly contribution and compound monthly at the same gross return. The 529 column has no annual tax drag (growth is federal-tax-free if used for qualified education). The UTMA column applies a simplified kiddie-tax drag: an estimated annual dividend yield generates taxable dividends, and the portion above the 2026 $2,700 threshold is taxed at the parents' marginal rate (Rev. Proc. 2025-32 Sec. 4.02). The trade-off card surfaces what differs at the age of majority: control, access, tax on withdrawals, and financial-aid impact.
What does this calculator NOT include?
It does not include state income tax, any specific state's 529 deduction or credit, realized capital gains from rebalancing, qualified versus ordinary dividend distinctions in the kiddie-tax calculation, or the Form 8814 election. It does not model fees that vary across share classes or platforms. It is education only, not advice on which account to open.
What is the age of majority?
The age at which a child gains full legal control of a UTMA or UGMA account, set by the state of residence. Often 18 or 21 depending on the state. The 529 plan does not have an age-of-majority handoff: the account owner (often the parent) retains control indefinitely.
Educational simulation only. Returns are assumptions, not predictions, and real results vary year to year. State income tax, specific 529 plan fees, and household-specific financial-aid math are not modeled here. Always verify with a CFP or CPA before making decisions. ClearMoneySchool does not provide personalized tax, financial-aid, or investment advice.