Developing a Funding Strategy
- Pre-Funding the Cost
- Your Pre-Funding Strategy Depends upon where You Are Now
- Monthly Investment Program
- Your Investment Objective
- Understand Risk
- Basic Strategies
- How Is Investing for College Different from Other Investing?
Monthly Investment Program
This table* shows how much more you have to invest each month, the later you begin a college investment program for your child.
|
Child's Age |
Public College |
College |
Private College |
| 0 | $390 | $585 | $780 |
| 1 | $406 | $609 | $812 |
| 2 | $423 | $634 | $846 |
| 3 | $442 | $663 | $884 |
| 4 | $462 | $694 | $924 |
| 5 | $486 | $728 | $972 |
| 6 | $511 | $767 | $1,022 |
| 7 | $541 | $811 | $1,082 |
| 8 | $574 | $860 | $1,148 |
| 9 | $612 | $917 | $1,224 |
| 10 | $656 | $984 | $1,312 |
| 11 | $708 | $1,062 | $1,416 |
| 12 | $770 | $1,155 | $1,540 |
| 13 | $846 | $1,269 | $1,692 |
| 14 | $941 | $1,411 | $1,882 |
| 15 | $1,062 | $1,593 | $2,124 |
| 16 | $1,224 | $1,836 | $2,448 |
| 17 | $1,450 | $2,175 | $2,900 |
| 18 | $1,789 | $2,683 | $3,578 |
* Assumes you start investing at the age of your child in the left-hand column and you invest each month through their senior year of a four-year college. College costs go up 5% per year and you invest your money, after taxes, at 7% per year.
To reasonably expect a 7% rate of return, you're going to have to take some risk and invest in stocks or growth investments.
Clearly, the longer you wait, the more you'll have to put away each month to cover the cost. Saving now makes it easier when the time comes to pay the bills.
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