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For more information, contact the MEMBERS Financial Services Representative serving CMFG Life Insurance Company for a no cost, no obligation consultation.
Quality Planning Is Essential

Part of Good Parenting

Part of good parenting (or grandparenting) is helping your children (grandchildren) with what they need today. It's also preparing your children for the future...for a time when they'll be responsible adults. College or post high school education can not only further your children's minds and/or bodies, it can also increase their chances for better paying jobs or careers.

Higher Education Pays Off
The value of higher education for your children is not just an intellectual one. It also has a significant monetary value. According to the 2000 U.S. Census Bureau, college graduates' annual incomes are 81% higher (on average) than those who only graduated high school. That's a gap of $1,000,000 in potential earnings!

Value Of A College Education
LEVEL OF EDUCATION AVERAGE ANNUAL EARNINGS
Grades 9–11 $25,100
High School Graduate $32,200
Some College, No Degree $38,900
Associate Degree $41,200
Bachelor's Degree $54,800
Master's Degree or Higher $72,200
Source: U.S. Census Bureau, 2006, PINC-03

Rising Costs of A Higher Education
You can be glad that a higher education "pays off" because the cost of a college education, for example, can be staggering. According to the College Board declines in state and federal funding for colleges and universities is fueling an increase in tuition costs across the country. For the 2014-2015 academic year, tuition and fees, room and board, books and supplies, personal expenses, and transportation average $25,544 for a four-year public university, and $50,289 for a four-year private college. All totaled, the cost of a four-year college education for someone starting in 2014, assuming an average 6% annual increase in expenses, is estimated at $111,744 for a public university, and $219,996 for a private college.

Projected College Costs
Number of years until child begins college Years child will begin college Total projected cost for 4 years at an in-state public university Total projected cost for 4 years at a private college
Current2014-2015$111,744$219,996
12015-2016118,448233,196
22016-2017125,555247,188
32017-2018133,088262,019
42018-2019141,074277,740
52019-2020149,538294,405
62020-2021158,510312,069
72021-2022168,021330,793
82022-2023178,102350,641
92023-2024188,788371,679
102024-2025200,116393,980
112025-2026212,123417,619
122026-2027224,850442,676
132027-2028238,341469,236
142028-2029252,641497,390
152029-2030267,800527,234
162030-2031283,868558,868
172031-2032300,900592,400
182032-2033318,954627,944

The above chart shows estimates of future costs for four years of college, including tuition and fees, room and board, books and supplies, transportation, and other personal expenses.

Estimates are based on the College Board's annual survey and assumes an average annual 6% increase in college costs. Note that actual increases may turn out to be lower or higher, and the college your child attends may be more or less expensive than the averages.

Benefits of Planning Early
Given the rising cost of a college education, plus inflation, you probably can't afford to wait until your son (grandson) or daughter (granddaughter) is in high school to start planning. Many responsible parents and grandparents are finding that starting to save before the child even enters kindergarten is none too soon. What are some of the advantages of starting early?
  • Your investments can grow over time
  • You can set aside smaller amounts of money over a longer period of time
  • The student (child) can complete his/her higher education with less debt
  • You and your child may have more time to make wise decisions about college or higher education choices.

The Power of Compounding
 7 years      10 years      15 years      18 years    

The above chart shows how small amounts of savings can add up in a tax-advantaged 529 college savings plan over time. The example assumes you invest in a hypothetical diversified portfolio that earns a 7% average annual investment return. It also assumes you make tax-free withdrawals. Keep in mind that this is a hypothetical example and is not indicative of future performance or success.

For more information, contact the MEMBERS Financial Services Representative serving CMFG Life Insurance Company for a no cost, no obligation consultation.


Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (800) 369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America. The Representative may also be a credit union employee that accepts deposits on behalf of the financial institution.


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