Developing a Funding Strategy

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 AgeNow Public College\$20,000/Year College\$30,000/Year Private College\$40,000/Year 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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