ABCDEFGHJKLMNOPQRSTUVWXYZAA
1
6%
529 plan before-tax return on savings
2.85x multiplier over 18 years for prepayment
2
$393,192
Projected total cost of college in 2036
1.8x multiplier for monthly contribution total
3
4
Initial Contribution2036 Savings from Initial ContributionMonthly Contributions2036 Savings from Monthly ContInitial ContributionRequired Monthly ContributionInitial contribution that requires zero monthly contributions:$137,752
5
$0$0$0$0$0$1,010
6
$10,000$28,543$20$7,786$10,000$937
7
$20,000$57,087$40$15,572$20,000$863
8
$30,000$85,630$60$23,357$30,000$790
9
$40,000$114,174$80$31,143$40,000$717
10
$50,000$142,717$100$38,929$50,000$643
11
$60,000$171,260$120$46,715$60,000$570
12
$70,000$199,804$140$54,501$70,000$497
13
$80,000$228,347$160$62,286$80,000$423
14
$90,000$256,891$180$70,072$90,000$350
15
$100,000$285,434$200$77,858$100,000$277
16
$110,000$313,977$220$85,644$110,000$203
17
$120,000$342,521$240$93,430$120,000$130
18
$130,000$371,064$260$101,215$130,000$57
19
$140,000$399,607$280$109,001$140,000$0
20
$150,000$428,151$300$116,787$150,000$0
21
$160,000$456,694$320$124,573$160,000$0
22
$170,000$485,238$340$132,359$170,000$0
23
$180,000$513,781$360$140,144$180,000$0
24
$190,000$542,324$380$147,930$190,000$0
25
$200,000$570,868$400$155,716$200,000$0
26
$210,000$599,411$420$163,502$210,000$0
27
$220,000$627,955$440$171,288$220,000$0
28
$230,000$656,498$460$179,073$230,000$0
29
$240,000$685,041$480$186,859$240,000$0
30
$250,000$713,585$500$194,645$250,000$0
31
$260,000$742,128$520$202,431$260,000$0
32
$270,000$770,672$540$210,217$270,000$0
33
$280,000$799,215$560$218,002$280,000$0
34
$290,000$827,758$580$225,788$290,000$0
35
$300,000$856,302$600$233,574$300,000$0
36
37
Rachel's Notes:
38
529 - Does not include travel to and from campus
39
Beneficiary - name self and then change to a childs name once they are born
40
Three Types of Accounts: Brokerage, Roth IRA, 529 all rely on market
41
1) Brokerage Account - is subject to be taxed on any gains you have. (rate of tax depends on how long you have had the stock) - you can get taxed on the gains of stock. Short-term capitol gains get taxed, long-term capitol = once you have had the stock for over 1 year). Losses can offset other gains we get in the stock market.
42
2) Roth IRA - special retirement vehicle invented to encourage people to set aside money early on so that they can retire. You are not supposed to take out money until retirement age. You get taxed up front for the money you put in and becuase of the power of compund interest, then by the time we retire, the money we put in will increase 5 - 7% compund interest. Taxed on year of contribution. Limit to contribute each year $5,500
43
3) 529 Account - similar to Roth IRA but only for education. Limit to contribution $15,000 per person, per year. But it could come from several people. We can technically contribute up to 5 years of 15k gifts to a 529 account as long as you dont add more over the next 5 years. Add to the account as much as you possibly can as early as you due to compound interest.
44
45
FYI - 401 K - You did not get taxed up front, but over the course of several years, it grows due to compound interest but then the government will be taxed.
46
47
Now YES because with all of these you have a choice of what you invest in. Even if it is only a 2% interest. It is still better than sitting in a bank. or under mattress.
48
https://www.scholarshare529.com/
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100