How Much to Save for Your Child's College Education

Here’s an easy to use calculator from SmartMoney.com for estimating how much you need to save for your child's college education. It assumes that you save through the sophomore year of college and that you make a monthly deposit to the savings account.

If you are unsure of values to use for tuition cost inflation or investment returns, I recommend using a 5% rate of inflation for tuition cost and an 8% rate of return on a 529 account that is invested in stocks.

This calculator showed me that a small change in assumptions can significantly affect the savings amounts. In an earlier post, I calculated I would need a yearly contribution of $12,000 until the start of college to pay for tuition. This calculator provided a lower number of $763 per month or $9156 per year if I contribute on a monthly basis and through the sophomore year, which is two additional years of contributions.

With either estimate, I will still need to save a significant amount of money for my child's college education.

This is not financial advice. Please consult a professional advisor.

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