What You Need to Know to Calculate College Savings

What you’ll need to have handy as you calculate your savings needs for your children’s college education:

  1. Current ages of your children
  2. Age to begin college (18 is default but could be any age up to 25)
  3. Current tuition and fees per year at the college of choice
  4. Current room and board per year at the college of choice
  5. Education cost inflation (College Board estimates it at 4.8% per year for the past 10 years)
  6. Current amount saved toward college
  7. Amount you plan to contribute monthly
  8. Rate of return, which depends on the type of investment. Consult your financial advisor for different investment options.
  9. Investigate all the education savings plans available to you (federal 529 savings, state 529/Prepaid Tuition, Coverdell ESA). You might need to calculate each one separately to cover all expenses.

Once you have gathered all your information, it’s fast and easy to calculate a savings plan.

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