Agenda

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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

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The 380,000 Baby


380,000
www.savingforcollege.com
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Steps to Funding College

• Estimate Cost of College
• 2. Evaluate Funding Sources
• 3. Establish a College Fund

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The Cost of College Today
collegeboard.org
Collegeboard.org
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Future Cost of College

• 2x General Inflation
• Between 6 9
• Newborn Cost of 60,0000 a year!!

Source www.finaid.org
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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
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Scholarships

• Average Size 2,523
• Only 5.5 of students receive scholarships
• Only 1 to 2 of athletes receive scholarships

Sourcewww.finaid.org
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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

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Saving For College

• 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?

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Saving For College

• Put a plan into place and follow it

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Source for Savings

• Savings Account
• 529 Pre-Paid Tuition Plans
• 529 Savings Plans
• Traditional IRA
• Roth IRA
• UTMA/UGMA

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Savings Account

• Pros
• Safe
• Liquid
• No penalties
• Little if any risk

• Cons
• Taxed each year
• Inflation

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Pre-Paid Tuition Plans

• Cons
• Financial Health
• Tuition Only
• Out of State Schools

• Pros
• No Inflation Worries

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529 Savings Plans

• Cons
• Inflation
• Possible Penalty

• Pros
• Flexibility
• Tax Free

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Traditional IRAs

• Cons
• Must Pay Taxes
• Hurt Retirement

• Pros
• Retirement Education

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Roth IRAs

• Cons
• Gains Taxable
• Hurt Retirement

• Pros
• Contributions taken out at any time

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UTMA/UGMA

• Cons
• Child gets control

• Pros
• Small tax benefits

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How to Choose?

• What is your priority?
• Is Your Retirement on track?
• How sure are you these funds will be used for
  education?

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Retirement is 1

• Roth IRA
• Traditional IRA

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Education is 1

• 529 Savings Plan
• Pre-Paid Tuition

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The Power of a Plan

• Hire a professional
• One Cohesive Plan
• Retirement
• Life Insurance
• Investments
• Home and Auto

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Questions?
Jay Langfelder 630-736-9376
Bob Kearns 847-888-3200
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