Am I saving enough for my daughter's education?

I live in NY and have a 9 year old daughter. I have saved $100K for her in a NY 529 Plan for college. I currently contribute $750/month into this account. Do you think this is sufficient enough savings for me to be able to fund a 4 year undergraduate education? Ideally, I would like to be able to support her full tuition at a good private school. I know it's difficult to predict the cost of college, but my personal calculation puts college costs at ~$70K/year in 2026.

College Tuition, Financial Planning
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April 2017
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Saving for a child’s college education is a major planning objective for many families. The unfortunate truth is that the cost of higher education has risen rapidly over the last few decades. The current average annual cost for a private 4-year undergraduate institution is ~$48,000 per year, including room and board. If we assume this costs inflates at a rate of 5% per year, you would be looking at a cost of ~$75,000 in 2026, increasing to ~$85,000 in 2029 when your daughter is a senior. Assuming an annualized rate of return of 5.7% per year, which will not happen year over year, you would need to save an additional ~$10,000 per year or $830 per month to meet the anticipated cost.

Now there are a lot of variables here that you should consider. First, recent legislation has been passed where New York families with incomes up to $125,000 may not be required to pay college tuition for SUNY and CUNY schools. You may be outside of these income limitations, and the law can change in the next 9 years. Second, even if that is the case, the average in state tuition for a SUNY school is ~$24,000 per year, including room and board. If your daughter decides to go to a SUNY undergraduate institution, it is arguable that you have already achieved your college savings goal. Third, you specifically mentioned a 4-year undergrad education, but have you considered whether or not your daughter may want to pursue an advanced degree?

To develop some optionality in your financial goal plan, you may want to consider savings vehicles outside of a 529 Plan. I recently wrote an article about the different methods of funding college education. This outlines some of the other ways you could think about college savings. Please feel free to contact me if you would like to discuss this in greater detail.

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