The projected costs for college in 18 years can be very intimidating…but there are ways to prepare for it. Just knowing the possible sticker price gives you the power to prepare! Without preparation, your retirement plan could be significantly impacted. The table below shows the impact on your retirement of a) financing college costs vs. b) starting your savings plan early. It can make a significant difference in your outlook for retirement!
Estimated Total Cost of College in 18 Years = $190,000
Est. Total Amount Paid For College if Family invests $5,000/Year from birth to Age 18 = $90,000 of Savings + $100,000 of Projected Investment Growth. That is a total of $90,000 Out Of Pocket.
Est. Total Amount Paid if Family saves nothing and finances the total amount = $190,000 Borrowed + $46,000 in Interest. That is a total of $236,000 out of pocket.
If your goal is to fund college for your child, a price tag difference of $146,000 (not including tax credits you can capture along the way) can derail your retirement plans. $146,000 invested over 10 years at 7% is nearly $300,000. You’ve finally solved the riddle…When does 90k = 300k? When you’re planning for college and retirement!!
Check out the clip below on how to start planning now…