One of your savings goals might be to help your children, grandchildren, or other students you know pay for a college education. With tuition costs rising at an average of 6% each year,1 it’s important to think strategically about college planning.
Be sure to max out your retirement accounts first, then prioritize and contribute to other savings goals, such as helping relatives pay for college.
Start saving early
If the cost of college continues to rise at its current rate, newborns will need about $284,0001 in today's dollars to attend a four-year, in-state public university, and nearly twice that to attend a private school.
While this figure may seem high, remember that saving for college is like saving for retirement—by starting early, investing regularly, and contributing as much as you can, you give yourself the best chance of success.
1. Source: Trends in College Pricing, 2011, The College Board.
This information is not intended to be a substitute for individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified advisor.