Scott and James discuss how to forecast and save for college.

Listener Question

My wife and I are 33 and have two children, ages 1 and 3. We'd like to save enough to pay for their college costs but we're not sure how to forecast what the cost of their college will actually be. College costs can vary widely, and have historically grown at different rates at different times. We're also not sure what type of college they will choose, or how much scholarship they might receive. Ideally we would save as tax-efficiently as possible (such as through a 529), but we're concerned about saving too much in a 529 in case they choose a less-expensive school, or get significant scholarship, etc. We're currently saving some in a 529 (to get our state tax deduction) and some in a regular taxable brokerage, which could either cover college costs or be used for other purposes down the road. But we're not sure how much in total to save since we're unsure what college will actually cost in 20 or so years. Can you help us with how to best plan for our children's college expenses?

Planning Points Discussed

• Utilizing Time Efficiently
• Capital Appreciation
• Purchasing Power
• Other issues (IRAs, Inflation, Financial Goals, etc.)

Timestamps:

3:54 - College Planning Overview

6:49 - Public College Planning

9:16 - How To Be On Track To Fund College

12:20 - Tax Benefits (state specific)

15:20 - Growth Example

18:31 - Funding Options

23:21 - Aligning Your Financial Goals 

LET'S CONNECT!

James

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Scott

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