Blog: List Layout - JOD Financial

20
Feb '26

Secure Retirement Plans: Annuities & Longevity Strategies

Written by SafeMoney Editorial Team in Annuities

Living longer is both a blessing and a significant financial challenge for retirees across America. While advancements in healthcare and lifestyle have increased average life expectancy, these longer lifespans can strain retirement savings if not adequately planned for. In this…

What types of options do I have when it comes to saving for my children's college education, which is best and why?

While the cost of college continues to increase at a torrid pace, there are ways to prepare for one of the biggest expenditures in your lifetime. With appropriate planning, disciplined savings and thoughtful conversations with your child you can significantly improve your chances for success.

Power of Starting Early & Saving Often

Just as the case with any savings goal, the sooner you start and the more disciplined your approach to saving the better off you are. The power of compounding cannot be overstated when looking at an 18 year time horizon. As an example we've created the table below to highlight the power of compounding and the difference in total savings when someone starts saving $1,000, $500 or $250 a month at the birth of their child vs. their 5^th birthday using a tax-deferred vehicle.

Savings Amount	Savings Beginning at Child's Birth	Savings Beginning on Child's 5th Birthday	Difference in Final Account Balance
$1,000 per month	$349,345.16	$219,171.86	+ $130,173.30
$500 per month	$174,672.58	$109,585.93	+ $65,086.65
$250 per month	$87,336.29	$54,792.97	+ $35,543.32

Assuming a 5% annual return you could have approximately $130,000 more in savings when the child turns 18, while only contributing $60,000 extra dollars by starting at birth vs. age 5 (when saving $1,000 per month). As you can see, before worrying about the actual cost or which school your child will attend, the most important action you can take is to simply begin saving sooner than later.

Impact of Inflation on the Cost of Education

Just as the power of compounding can dramatically affect the amount of your savings, so too can inflation affect the cost of a college education. Recent research suggests that college tuition could continue to increase anywhere between 6% – 7% over the next several years. This is nearly three times the current rate of inflation for the majority of consumer products and services.

Balancing the cost of raising a family, saving for your own retirement and saving for your children's college education can be daunting tasks, but all of these should be considered.

Using our Financial Planning software "NaviPlan", we have created the table below to highlight the dramatic impact inflation can have on the cost of secondary education over the next 18 years. Using current tuition figures (room & board included) for a PA resident and a 6% rate of inflation, we were able to highlight the projected cost for the following four well-known schools at different cost levels.

School	Current Annual Cost	Projected Cost in 18 Years
West Chester University	$17,589	$219,627
Penn State University	$28,434	$355,045
Ohio State University	$39,031	$487,366
University of Pennsylvania	$63,526	$793,226

Publications, Insights & News from the team at Annuity Strategic.