College Savings Calculators
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Careful planning is needed these days to prepare for the extremely expensive college adventure.
These Excel-based college savings calculators will help you determine how much you'll need to invest, both lump sum, and/or monthly, to reach a future college funding need, assuming out-of-pocket costs and various time-value-of-money input.
In English, it calculates how much it will cost to send someone to college, and how much one needs to save to pay for it.
Our college savings programs come with a Monte Carlo simulator for stress testing scenarios.
There are two college fund calculators: The single college planner is for one student, and the multiple version is for analyzing up to five students at once.
Both college calculators have a unique financial calculator sheet that takes taxes into account in great detail, so you can compare 529 college savings plans with investing yourself in a non-529 plan discount brokerage account (AKA Doing It Yourself).
You can run the analysis if students are already in college, afterwards, and also compare the difference between public vs. private colleges.
You can also see the difference in the savings, payout, and expense amounts needed with a Section 529 Qualified Tuition Plan vs. just saving in a taxable investment account.
With all of the income and expense manual overrides, you have complete control over every dollar in every year.
You can also control out-of-pocket costs, all of the savings, growth rates, taxes, withdrawals, and investment expenses down to the dollar in every year.
This matters because it's important to know exactly how much to save, because it's very expensive, and one needs to avoid lacking funds being the reason why they didn't graduate. The only way to know how much is needed, is to input and account for all of these factors that will happen to a student in the Real World.
There is also a detailed student budget calculator for both public and private colleges, so you can compare those differences on the same page.
Excel's built-in Goal Seek function makes it so you can perform any "What If" scenario that any other college savings calculator can do, plus dozens more they can't do.
For example, if you wanted to see how much rent a student could afford, you'd click on cell G36 of a 529 presentation sheet, and then go to Data, What-If Analysis, Goal Seek, click the middle field, input 0, go to the bottom field, and then go back to the input sheet and click on the Monthly Rent input field, and it automatically changes the amount of rent until you don't need to save anymore.
You can do any "What If" you can think of, like the minimum average rate of return needed or the bottom line rate of return difference between 529 and DIY.
You'd Just Input:
• Basic factors like the student's name, current age, age the student will start college, how many years in college, etc.
• Total cost (in today's dollars), and how much will be paid out-of-pocket during college. The total cost is accounted for in a detailed monthly student budget. You can also ignore all of the details, and just input total estimated monthly expenses. You can also ignore out-of-pocket all together.
The student budget has plenty of expense items, you can set a different inflation rate for each expense, and you can manually override them to be whatever you want them to be in every year (to account for vacations like a big Europe trip in only one-year).
• How much you have saved now, and how much you plan to save.
• Assumed rates of return, inflation, and taxes. You can have different investment growth rates in every year.
Then just look at the results. It has great year-by-year charts that show how much more is needed to graduate on schedule. If there are deficits (the student won't have enough money to make it through college), then it shows how much, in both lump sum or monthly payments, is needed now to fully fund everything. It basically does everything but look up current costs of a particular college.
College Planner Features
• Fee-Based financial planners can tap the 529 market and gather those assets. Now you can show your prospects and clients the advantages and disadvantages of section 529 savings plans.
• It displays just about every dollar in every year to help understand how everything works. Everything flows from right to left, and then down, in a logical manner so you can see exactly what's going on at every step.
• It allows you to account for out-of-pocket funds while the student is in college. Out-of-pocket funds will typically come from loans, grants, gifts, family giving money from their checking accounts, students working, etc. Any money coming from anywhere other than the investment account is OOP. This is useful when parents want their children to pay X% for their own education, as it estimates how much is needed in every year.
The difference between the costs of college and what will be paid out-of-pocket is what the program uses to calculate the amount of money that needs to be withdrawn from the investment fund.
• It displays all of the figures for comparing public vs. private colleges at the same time. Everything was just copied, so the only difference between the two scenarios is the increased costs of attending a private college.
This is also very useful when comparing the budgets of different colleges.
You don't have to be limited to only comparing public vs. private college costs here; you can also compare living at home vs. dorm, or any other scenario. This allows you to compare the bottom lines of two different budget / expense scenarios.
Another example of an expense difference would be expenses of the investment account, like 529 vs. DIY, or commissions vs. ticket charges vs. wrap fees, etc.
• Since it's an Excel spreadsheet, you can run and save an unlimited number of versions to compare all of the different scenarios you want to.
• You can input continued savings, and tinker with the amount currently saved, and it will determine the net present value of the funding needed. It shows you all of the important present value numbers so you can see what a huge difference the high cost of college tuition inflation will have - and the difference between 529 college plans and taxable savings.
It also displays the bottom line inflated net present value of money needed to fund the whole education. This answers the question if Grandma just wants to write one big check to fully cover the whole deal today.
• You can have a different rate of return for the accumulation phase and the payout phase. Usually you want to take less investment risk when the student is actually in college, so you can enter a lower rate of return in the manual override columns for years you want to be more conservative. You can even simulate losing money in down market years.
• You'd set the rate of return used to calculate the additional funding needed. This can be a different rate of return so you can be more conservative or aggressive than in your regular investments.
• You can set an annual expense inflation factor for each expense individually. These can also be different for each student. Also, if you think a particular year will have negative college inflation (where tuition is on sale or something), you can also use the manual overrides to reduce total expenses in any individual year.
So you can input things like trips to Europe while going to a U.S.-based college, while comparing that to attending college in Europe for a short time. This college funding planner that will account for these one-time cash flows.
• You can control savings, investment growth, and withdrawals down to the dollar in every year by using the manual overrides. Both the public and private college calculators have separate manual overrides for complete control over most everything.
For example, you can manually override the contributions (additions to the investment account) to account for unequal cash flows in any year, even during and after college.
• For financial advisors, it summarizes everything on the presentation sheet for a nice, simple, clean bottom-line client presentation.
You can use the 529 vs. DIY comparisons to show how if you can get 1% to 2% more investment return, you can bag the whole 529 mess and get paid regular AUM fees.
• It tells you the total amount spent (withdrawn from the account). This tells you the total cost in dollars actually spent.
• It shows you the year, year number, age of the student, and whether they're in college that year; to help you keep everything straight.
• It has a thirty-year window to account for late bloomers and very long periods of college. This large window is especially useful in the five-student college plan because of the larger range of ages between youngest and oldest student.
• You can see how much to save using both Section 529 Plans and non-qualified tuition savings plans - both having public and private budgets.
• With the multiple-student version, you can use a surplus in one student's investment account to fund a deficit in another's.
• It summarizes everything in text / numbers and then has several charts and graphs to show all of the pertinent information. There are too many features to list here with all of the charts, download the free demo to see more.
• The cash flows can be integrated into other modules of the financial plan software (retirement, cash flow, life insurance needs, net worth, etc.).
• The program can be used for other things other than college planning. Any time there is a need for a limited series of annual payments in the future, this will work fine.
Please note that this college savings program does not calculate or determine eligibility for 529 plans, student loans, nor grants. There is also no database of estimated costs of attending any college. They change too much and are easily found online (the link to that is in the directions).
It has macros that (an Excel macro is a little internal program that takes a few clicks to run that performs tedious chores for you semi-automatically):
• Updates an older version of the college savings calculator into the new version, by copying all inputs from old to new. So if you have 10 client college plans, then it only takes a few minutes to update all of them to the newly updated version of the college savings calculator.
• Deletes all data input into each of the five students' input areas individually.
• Performs the Monte Carlo simulation on the college savings plan.
To download the demo, right click on the link below, and then choose "Save (Target) As..." to save to your hard drive. Then find it and open with Excel.
Be sure to see the sheet that shows what colors should look like.
- or -
After you have a "demo," read the instructions
The "demos" are the actual spreadsheets, without formulas, so you won't be able to do anything but look at them.
The pages on the free sample comprehensive financial plan print better than the demo.
For $10 more, you can also get the Small Asset Allocator with Mutual Fund Picks if you want a turnkey system for building an investment portfolio for your college savings.
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