In previous posts, I estimated we would need to save $12,000 per year in one calculation and $763/month ($9,156/year) in a second calculation to pay for a private college education for our 2-1/2 year old daughter. Recently I found another calculator by Archimedes System that I thought was comprehensive and easy to use. Here are the elements I like:
For my 2 year old daughter, the calculator estimated I need to save $811 per month ($9,743 per year) to pay for 100% of her college tuition. This is consistent with the previous two college savings calculations done above. Therefore, we will need to save $10,000 to $12,000 per year to confidently cover our daughter's college education .
To account for the possibility that she may attend a lower cost school, we are only putting a portion of the money (about 50%) in tax advantaged college savings accounts. The balance we keep in our personal savings account. Thus, this money can be used for other purposes should it not be needed for college expenses.
For more on Crossing Generations, check back every Thursday for a new segment.
Photo Credit: morgueFile.com, Heather M.
This is not financial advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC
Subscribe to My Wealth Builder
2 comments:
Are you maxing out your Roth IRAs? If not, that would be a better place than your savings account. Actually bonds and stocks would be better than a savings account, given that a savings account is earning less than 2% these days.
@Frugal Student,
Yes, we are maxing out our IRAs. Typically, we contribute to a Roth, but last year, it was better for us to contribute to a traditional IRA.
Post a Comment