Post on 03-Jan-2016
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Agenda
•Cost of College
•Is the Cost of College really worth it?
•Ways to Fund College?
•How Should You be Saving?
•Put a Plan into Place
The $380,000 Baby
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$380,000www.savingforcollege.com
Steps to Funding College
1.Estimate Cost of College
2. Evaluate Funding Sources
3. Establish a College Fund
The Cost of College Today
collegeboard.org
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000
Public Two-Year Commuter
Public Four-Year In-State
Public Four-Year Out-of-State
Private Nonprofit Four-Year
Undergraduate Budget
Tuition and Fees Room and Board Books and Supplies*Collegeboard.org
• 2x General Inflation
• Between 6% & 9%
• Newborn: Cost of $60,0000 a year!!
Future Cost of College
Source: www.finaid.org
Is It Really Worth It?
Education Level: Before-Tax Earnings
Professional Degree $ 100,000
Doctoral Degree $ 91,900
Master's Degree $ 67,300
Bachelor's Degree $ 55,700
Associate Degree $ 42,000
Some College, No Degree $ 39,700
High School Graduate $ 33,800
Not a High School Graduate $ 24,300
Source: Trends.collegeboard.org & Department of Labor
• Average Size: $2,523
• Only 5.5% of students receive scholarships
• Only 1% to 2% of athletes receive scholarships
Scholarships
Source:www.finaid.org
Financial Aid
Expected Family Contribution: Amount of college costs your family is expected to pay without financial aid.
5.6% of Parents assets
20% of a child's assets
1. Education Funding vs. Retirement?
2. What percent of college will you fund?
3. Are your children going to attend a private or public university?
Saving For College
• Put a plan into place and follow it
Saving For College
• Savings Account
• 529 Pre-Paid Tuition Plans
• 529 Savings Plans
• Traditional IRA
• Roth IRA
• UTMA/UGMA
Source for Savings
Pro’sSafeLiquidNo penaltiesLittle if any risk
Savings Account
Cons Taxed each year Inflation
Pre-Paid Tuition Plans
Pro’sNo Inflation Worries
Cons Financial Health Tuition Only Out of State
Schools
529: Savings Plans
Cons Inflation Possible Penalty
Pro’s Flexibility Tax Free
Traditional IRA’s
Pro’sRetirement &
Education
Cons Must Pay Taxes Hurt Retirement
Roth IRA’s
Pro’sContributions taken
out at any time
Cons Gains Taxable Hurt Retirement
UTMA/UGMA
Pro’sSmall tax benefits
Cons Child gets control
• What is your priority?
• Is Your Retirement on track?
• How sure are you these funds will be used for education?
How to Choose?
• Roth IRA
• Traditional IRA
Retirement is #1
• 529 Savings Plan
• Pre-Paid Tuition
Education is #1
The Power of a Plan
• Hire a professional
• One Cohesive Plan
•Retirement
•Life Insurance
•Investments
•Home and Auto
Questions?
Jay Langfelder 630-736-9376
Bob Kearns 847-888-3200