529 & Custodial Roth IRA Calculator

Maximizing your 529 is smart, but it doesn't have to be your only play.

Compare how splitting your child's college contributions between a 529 plan and a custodial Roth IRA could grow side-by-side, and see how each account is treated by the FAFSA Student Aid Index.

A 529 can be a powerful education savings tool, but seeding a Roth IRA early can give your child something different: decades of tax-advantaged growth, more long-term flexibility, and the ability to withdraw contributions penalty-free for any reason.

The catch is that Roth IRA contributions require earned income. Halfmore helps parents create the structure around that income by documenting age-appropriate household work, running payroll, and helping families route eligible earnings toward a custodial Roth IRA.

Use this calculator to see how combining a 529 with early Roth IRA contributions could give your child both college funding and a massive head start on long-term wealth.

529 & Roth IRA Calculator

What's your child's age?

Pick between age 0 and 17

How much can you contribute until your child turns 18?

How should it be split?

Allocation between Custodial Roth IRA and 529 plan

35% Roth IRA65% 529

$175/mo to Roth$325/mo to 529

Expected annual rate of return

Roth IRA

Long-term S&P 500 average. A Roth can stay aggressive since the time horizon is decades, not years.

529 Plan

A bit lower, since 529 portfolios usually shift conservative as college nears to avoid losses right before tuition is due.

How do assets affect the FAFSA?

The FAFSA (Free Application for Federal Student Aid) is the form families file to qualify for college aid. It produces a Student Aid Index (SAI), an index number colleges use to determine financial aid eligibility and build aid offers. A lower SAI can indicate greater financial need, but it is not the amount your family is expected to pay and does not guarantee additional aid. Where you hold your savings can affect that number.

FAFSA Student Aid Index (SAI): Asset Impact

Projected at age 18 · when financial aid is calculated

Colleges use the FAFSA SAI to determine financial aid eligibility and build aid offers. Reportable parent assets can increase the SAI, but the effect depends on the full formula, including the asset protection allowance and parent income. The estimate below shows the maximum modeled asset impact, not guaranteed aid or out-of-pocket savings.

529 Plan

$55,972

Parent-owned 529 is a reportable parent asset. Up to 5.64% of the balance may affect the SAI under the full formula.

Maximum modeled SAI impact

+$3,157

Custodial Roth IRA

$34,043

A Roth IRA is a qualified retirement account. Balances are not reported as an asset on the FAFSA.

SAI contribution from Roth

Maximum modeled reduction

$1,920

in asset-driven SAI compared with holding the same projected balance entirely in a parent-owned 529, a 38% reduction in this simplified estimate. Splitting 65% / 35% (529 / Roth) excludes the Roth balance from the FAFSA asset calculation. Actual SAI and aid outcomes depend on the full FAFSA formula and the college's aid offer.

Heads up: while Roth balances are not counted as assets, withdrawals taken for college can count as student income on a future FAFSA (assessed up to 50%). The contribution portion can be withdrawn anytime tax- and penalty-free. Prior-prior-year rule means senior-year withdrawals usually no longer affect aid.