Developing a Funding Strategy

Your Pre-Funding Strategy Depends upon where You Are Now

You just brought the baby home from the hospital and you decide to start a monthly investment program to fund four years of college costs at $30,000 per year (in today's dollars). You'll need to save $585 per month through your child's senior year in college to pay the $120,000 cost (this assumes a 5% inflation rate and a 7% investment earnings rate).

Suppose your child is ten years old and you haven't saved anything yet... now you'll need to save $984 per month to fund the $120,000.

If your child starts college in one year and you haven't done any pre-funding, you'll need to save at least $2,175 per month through their senior year of college to fund the $120,000 for the four years. That's more than double what you would have needed if you started saving when your child was ten. That's why we recommend you begin a monthly funding program as early as possible.

Share Article:
Add to GooglePlus

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC. Insurance products are offered through LPL or its licensed affiliates. Premier America Credit Union and Premier America Investment & Retirement Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Premier America Investment & Retirement Services, and may also be employees of Premier America Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of Premier America Credit Union or Premier America Investment & Retirement Services. CA Insurance License #0759204, TX Insurance License#1643255.

Securities and insurance offered through LPL or its affiliates are:

Not Insured by NCUA or Any Other Government Agency Not Credit Union Guarantee Not Credit Union Deposits or Obligations May Lose Value

BrokerCheck