- How can I start investing for my retirement?
- I've spent a lifetime saving, am I prepared?
- How can I plan for my children's education?
- How do I develop an investment strategy that supports my lifestyle?
- I have money to invest. Where do I begin?
- As a business owner, how do I plan for my own and my employees' needs?
- How can I lower my tax bill?
- How can I ensure the financial security of my family?
- How can I ensure that my wealth is transferred to my loved ones?
- How can I manage my short-term needs while maintaining my long-term financial goals?
CHOOSE BY LIFE EVENT
HOW WE APPROACH YOUR NEEDS
How can I plan for my children's education?
Children are always asked what they want to be when they grow up. As a parent, you want to make sure nothing stands in their way, especially something like the ability to finance their education.
Your Savings Plan
The first step in creating a college savings strategy is to determine how much of college expenses you want to cover given the total cost. To reach this number, you should take into consideration the type of college (public or private) your child may be interested in, your time horizon and, of course, inflation.
The Cost of Learning
Funding a college education is one of the most valuable gifts you can give a child, but unfortunately, it can also be one of the most expensive.
The average cost of one year of school today (tuition, fees, and room and board) is:*
- Public School (in-state) - $15,213
- Private School - $35,636
Add to that the historical 6% average inflation increase for college costs and these prices can skyrocket.
The average cost of four years at a public school (tuition, fees, and room and board) is:*
- Today - $66,551
- In 18 Years - $189,959
You're not alone if you think a financial goal like this seems intimidating or out of reach. But with careful planning and early saving, it doesn't have to be. Starting early and investing consistently are two key factors in reaching your goal. For example, look at how your savings could grow if you start when your child is a newborn.
Child's Age Now: Newborn
- Current savings for college - $0
- Total cost for fully funding a four-year public college, in-state, in 18 years - $189,959
Assuming a 7% investment rate of return, this goal can be reached with:
- a monthly investment of $431 or
- one lump sum investment of $60,852
This calculation uses the estimated cost of college, including tuition, fees, and room and board. It assumes monthly savings will stop once the child begins college. Rate of return is for illustrative purposes only; it does not represent any currently available investments.
*Source: The College Board Trends in Pricing 2009 and Edward Jones 2009.
How We Can Help
We can't stress enough the importance of early planning, but if you haven't started yet, don't panic. This is not the only way to reach your goal.
We also understand that not everyone is able to save hundreds of dollars a month - but that doesn't mean sending a child to college is any less realistic. If your savings won't be able to cover all of your college costs, other family members may be able to help and you can also look into student financial aid, scholarships, grants, loans and work-study programs.
Contact your local financial advisor, who can help you with your savings goals and make sense of the different types of college savings plans that are available. We can also help you explore investment options and discuss potential financial aid eligibility.
