UTMA Calculator
A UTMA calculator projects how much a custodial account under the Uniform Transfers to Minors Act will be worth when your child reaches the age of majority. Enter the current balance, monthly contributions, expected return, and the beneficiary's current age to see the projected handoff value plus an estimate of the annual kiddie tax drag.
What a UTMA account is
A UTMA (Uniform Transfers to Minors Act) account is a custodial brokerage or bank account held in a child's name with a parent or relative as custodian. The adult manages the assets until the beneficiary reaches the age of majority (18, 21, or up to 25 depending on state). At that point, the account transfers irrevocably to the beneficiary, who can use the funds for anything, not just college.
The math this UTMA calculator uses
This is a monthly compound interest model. Balance at handoff = current balance times (1 + r/12)^(12 x years) plus the future value of the monthly contribution annuity. With $5,000 starting balance, $200 monthly, 16 years to majority, and 10% annual return, the projected balance is about $119,000. Of that, $43,400 is your contributions and roughly $75,400 is investment growth.
UTMA calculator S&P 500 assumptions
When people search for a UTMA calculator s&p 500 they usually want to use the long-run S&P 500 average as the return assumption. The S&P 500's nominal total return has averaged about 10% per year since 1926, and about 7% after inflation. Use 10% in this calculator for nominal dollars. Use 7% if you want the projected balance expressed in today's purchasing power. Actual year-to-year results are volatile, so treat the output as a median long-run projection rather than a guarantee.
The kiddie tax
Unearned income in a UTMA account (interest, dividends, realized gains) is subject to the kiddie tax rules through age 18 (or 24 if the child is a full-time student). For 2024, the first $1,300 is tax-free, the next $1,300 is taxed at the child's 10% rate, and anything above $2,600 is taxed at the parent's marginal rate. This calculator estimates that annual tax at a 24% parent bracket. High-income families may lose more to taxes than they would in a 529 plan, which is a key tradeoff when choosing between the two.
When a UTMA is the right choice
UTMA accounts are flexible: the money can fund college, a car, a wedding, a down payment, or a business. 529 plans are restricted to education expenses without penalty. UTMAs have no contribution limits beyond the federal gift tax exclusion ($18,000 per donor per beneficiary in 2024). The downside is that the beneficiary gains unrestricted control at the age of majority and the account counts more heavily against financial aid than a 529.