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“According to a college cost calculator I found online, the four-year cost at a private school would be approximately $289,000 for the older one and $325,000 for the younger.If what’s on the back of your envelope were solid, you’d be in good shape. By putting an average of $5,000 a year into each account, you figure, you’ll have more than half the bills covered. Financial aid might cover much of the balance.—College will cost more than you think.
Inhabitants of New York City have three motivations to invest in 529s. Their home-state college savings plan, run by Vanguard, is an excellent one with low costs. The tax exemption on account earnings is worth a lot because their state and local income taxes are high. The deduction for putting money in is worth a lot for the same reason.
If inflation averages 2.5% , a reasonable expectation for the real return on a stock-bond blend is only 1.5% a year. Savers just aren’t being well compensated these days. Nothing you can do about that. Most schools base their aid on the Free Application for Federal Student Aid, or Fafsa. It includes measures of both wealth and income. A few hundred schools, including all the prestigious ones, use a different document, the College Scholarship Services Profile.
Fafsa schools disregard home equity. Profile schools count it as wealth, subject to the 5% annual assessment, but often only up to a point . Thus, making extra principal payments on the mortgage might shelter some of your wealth from the college.
Uhh and why does Ben Affleck has to do with it 🤔