College Cost Savings
Saving for a child's education requires a long-term plan. And, like saving for retirement, the earlier you start your plan the better. Use this calculator to help develop or fine-tune an education savings plan. Click the "View Report" button for a detailed look at the results.
Definitions
- Age
- Current age of children. This calculator is based on each child beginning their college education at age 18. The difference between their current age and 18 is the number of years your have to save.
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- Annual Tuition
- Current estimated cost of one year of tuition and books. This amount should be per child and be specific to the school they may be interested in attending. The cost of college for the 2006-2007 school year, including tuition, room and board, books, supplies, transportation and other personal expenses, as reported by the College Board in its 2006 Trends in College Pricing was $12,796 for one year at a four-year public college and $30,367 for one year at a four-year private college. For the purposes of this calculator all expenses are assumed to be due at the end of the year.
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Room and Board
Current estimated cost of one-year room and board. Like tuition and books, this amount should be per child and specific to the school they may be interested in attending. For the purposes of this calculator all expenses are assumed to be due at the end of the year.
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- Education Cost Inflation
- This is the percentage to expect educational costs to increase per year.
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- Current Amount
- The total amount currently saved for a child's (or children's) education.
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- Monthly Contributions
- The dollar amount planned to save per month toward a child's (or children's) education. All amounts are assumed to be added to the account at the beginning of the month.
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- Rate of Return
- The annual percentage rate expected to earn on an educational savings plan. The average annual rate of return for the U.S. stock market has been about 11%. You may wish to use a more conservative rate of return if the child is within 10 years of enrolling in school. This calculator compounds all growth annually. For the purposes of this calculator, taxation is not factored into the results. If you pay taxes on the interest, dividends or capital gains from these investments you may wish to enter an after-tax rate of return.
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Information and interactive calculators are made available to you as self-help tools for your independent use. We cannot and do not guarantee their accuracy or their applicability to your circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance and legal issues.
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