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

+ =

$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