In state costs for a UC Berkeley education are currently $41,528 per year.
That’s $160k to send Junior out to drink beer for 4 years.
If Junior was just born today and college inflation remains at 3% a year, then you’ll need $272,389 in 18 years.
That’s a lot of stinkin’ money!
But if you put away “just” $80,000 today in a 529 Plan, then you’ll be all set.
If you wait 10 years, then you’ll need to put away double – $160,000.
(And obviously if you wait 18 years, you’ll need to save $272,389.
The point?
The sooner you save up for Junior’s college, the less you’ll actually need to save because you’ll have more time to leverage compound interest.
(And if it’s in a 529 plan, then you won’t even get taxed on the compound interest.)
