- Age of children
- The current age of your children. The difference between their current age and the age they start college is the number of years you have to save.
- Age to start education
- The age your child will begin college. The default is 18, but this can be any age up to 25.
- Annual tuition
- The current estimated cost of one year of tuition and books. This amount should be per child and be specific to the school they may be interested in attending. The average published costs of college for the 2023-24 school year (including tuition, room and board, books, supplies, transportation and other personal expenses) as reported by the College Board:
| Public 4-Year (in-state tuition) | $11,260 | $17,580 | $28,840 | $900 |
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| Public 4-Year (out-state tuition) | $29,150 | $17,580 | $46,730 | $1,490 |
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| Private 4-Year | $41,540 | $18,880 | $60,420 | $2,850 |
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For the purposes of this calculator all expenses are assumed to be due at the end of the year.
- Room and board
- The current estimated cost of one-year room, board and any other expenses not included in annual tuition. This could include room and board, books, supplies, transportation and other personal expenses. Like tuition, this amount should be per child and specific to the school they may be interested in attending. For the purposes of this calculator, all expenses are assumed to be due at the end of the year.
- Education cost inflation
- This is the percentage that you expect educational costs to increase per year. Data provided by The College Board's "Trends in College Pricing 2023" reported tuition and fees increased approximately 4.8% annually over the past 30 years. 2023 saw a smaller increase of approximately 2%.
- Current amount
- The total amount you currently have saved for your children's education.
- Monthly contributions
- The dollar amount you plan to save per month toward your children's education. All amounts are assumed to be added to your account at the beginning of the month.
- Rate of return
- This is the annually compounded rate of return you expect from your investments. This will also be the rate used if you end up with a negative balance and need to borrow money to meet your goal. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
