BOSTON – Fidelity Investments last week released its annual College Savings Indicator Study, showing that families, on average, are on track to save only 29 percent of the college costs they intend to cover by the time their child graduates high school.
The study was released in concert with a new “College Savings 2K Rule of Thumb” calculation and customizable calculator to provide parents with a tool to measure savings.
“Every family’s situation will be unique, which means there isn’t a one-size-fits-all answer to the question of how much to save,” said Keith Bernhardt, vice president of college planning at Fidelity. “However, for many, a savings rule of thumb provides a much-needed starting point from which families can build a more robust plan to meet their goals.”
The so-called “rule of thumb” assumes a goal of covering 50 percent of annual college costs for a four-year public school. The calculation requires multiplying a child’s age by $2,000, and the total represents how much families should have saved to date to be on track.
The College Board estimates the cost of a four-year, in-state public college is about $20,090 per year versus the annual cost of $45,370 for a four-year private college.
The full report and calculator can be found at the Fidelity website.
Eli Sherman is a PBN contributing writer.