A child born in 2013 that begins kindergarten in the fall of 2018 would attend college between the years of 2031 and 2035. If that child attends an average private four-year college, and if the annual price increases for private colleges experienced over the last 30 years (+5.7% per year) continues into the future, the aggregate four-year cost of the child’s college education (including tuition, fees, room and board) would total $483,238 or $120,810 per year.
The first question is: Are you saving enough to pay for this? The second question is how will your family pay for this if you die prematurely and have not accumulated these funds?
The first question depends primarily on your cash flow and investment acumen. The second can be solved with the purchase of life insurance. The cost for the premium will be pennies on the dollar. The cost for not doing this may be a child who is unable to go to college or has incredible financial struggles to do so. Shane’s story is a stark reminder.