Most of us aren't independently wealthy, so we need to be planning and saving for our retirements. There are lots of guides and advice regarding figuring out how much money you'll need to retire, but many leave out another key financial goal: Saving for your kids' college expenses.

That can throw a wrench into your financial life, because college tends to be quite expensive these days. Here's a look at how you might estimate what kind of war chest you'll need for retirement and what college costs are, too, followed by some goal-attaining strategies to consider.

Paper cutout family with expense categories printed on torn paper scraps

Image source: Getty Images.

Retirement costs

It's hard to save effectively for both retirement and college expenses if you don't know how much you'll need for them.

The amount of money you'll need to retire depends on a bunch of factors, such as your age now, when you want to retire, your expected expenses in retirement, how much income you'll need in retirement, and so on. Remember to factor healthcare expenses into your planning, as they can be hefty: A 65-year-old couple retiring today will spend, on average, a total of $275,000 out of pocket on healthcare, according to Fidelity Investments.

You might use the imperfect but helpful 4% rule to arrive at a rough idea of how much you need to save for retirement. It suggests withdrawing 4% of your nest egg in your first year of retirement and then adjusting withdrawals for inflation after that. Think about the annual income you want to start retirement with -- let's say it's $60,000. Subtract any revenue streams you anticipate having, such as Social Security. If you expect to get about $25,000 from that, you may need to come up with the other $35,000 on your own -- perhaps through a blend of dividends from stocks, bond interest, and sold-off investments. Multiply the $35,000 by 25, and you'll arrive at a nest egg target of $875,000. That's what you'd need to start retirement with if you wanted your 4% withdrawal to amount to $35,000.

College costs

College, meanwhile, is such a costly goal for many people that it deserves dedicated and often aggressive saving, too. Just what does college cost? Well, it varies widely depending on the college or university in question, how much financial aid is offered, and whether the student can snag any scholarships. That said, here's some context for you, per the College Board:

  • The average cost of tuition and fees for the 2017-2018 school year was $34,740 at private colleges, $9,970 for state residents at public colleges, and $25,620 for out-of-state residents attending public universities.
  • The average cost of room and board in 2017-2018 ranged from $10,800 at four-year public schools to $12,210 at private schools.

Don't let that get you down, though, because there's good news, too: There's a lot of financial aid available and more scholarships than you could imagine, (many of which go unclaimed because no one applied or qualified).

Yes, financial aid is intended for members of low-income households, but households with adjusted gross incomes topping $100,000 can receive aid, too. Princeton University's website states that, "For the Class of 2021, 100% of families making up to $180,000 per year qualified for financial aid." Unless you're you're extremely wealthy, you should apply for financial aid, because you never know.

"Nearly all students qualify for federal aid, and 85% of four-year college students receive some type of aid," says Kim Cook of the National College Access Network.

how much can you save on a white background, being circled in red by a hand

Image source: Getty Images.

How much you need to save to retire and send your kids to college

So when you combine your dual goals of saving for retirement and putting your kid(s) through college, how much do you need to save? The answer will depend on a host of factors and will be different for every individual.

The folks at took a stab at coming up with an answer, releasing a list of the 10 least expensive cities in terms of saving for college and retirement. They assumed that their subject is 30 years old, will send two kids to an in-state college in 20 years, and will retire at age 65. They further assumed that the 30-year-old had saved $35,000 already and that this sum, as well as their investments over the next 35 years, would grow at an annual average rate of 5% after inflation. (Inflation's long-term average is close to 3%, so you might think of this as an annual average growth rate of 8% before inflation.)

The table below shows the five cities with the lowest required savings rates, followed by numbers for the country as a whole. Odds are that wherever you live, your costs will be well above these five cities, but check the national numbers to get a sense of what's more typical in our country.



Median Household Income

Cost of Living in Retirement

Cost of Attending College (2 Kids)

Amount to Save Each Month


Hattiesburg, Mississippi






Tupelo, Mississippi






Jackson, Mississippi






Laramie, Wyoming






Gulfport, Mississippi












What to do

If your town isn't among the ones above, don't worry. Many regions not listed above have relatively reasonable costs. However, if you know you're in an area with an above-average cost of living and pricey state schools, you have some options.

One option is to move to an area with a lower cost of living. Before you dismiss this idea, check out the cost of living in any cities of possible interest to you. has a handy calculator tool that can show you the difference in cost of living between any two major cities.

A more appealing option is to remain in the same town but downsize your home. A less expensive house will have lower mortgage payments, smaller utility bills, less square footage to maintain and repair, and lower taxes and insurance. You may like your big house, but there are a lot of savings to be realized by living below your means.

Another strategy that you can undertake while staying put is to simply ramp up your savings and invest as effectively as possible. For example, if you're many years away from retirement and college, consider keeping most of your savings in the stock market, which has historically grown by an average of about 10% per year before inflation -- a much faster rate than bonds and other alternatives. You can do so via simple, low-fee index funds, such as ones based on the S&P 500. (Find more ideas here.)

The table below shows how much you might amass over various periods if you regularly save various sums that average annual growth of 8% (pre-inflation):

Growing at 8% for

$5,000 Invested Annually

$10,000 Invested Annually

$15,000 Invested Annually

10 years




15 years




20 years




25 years



$1.2 million

30 years


$1.2 million

$1.8 million

Calculations by author.

The table above is also helpful because it shows what you might achieve over shorter periods than the 35-year period used in's study -- because, after all, you may be well past 30 years old. (You may only have one kid to send to college, too -- or four kids.) You can use it to ballpark two different savings goals, too. Perhaps you want to accumulate $150,000 over a decade for college expenses; you'd have to save around $10,000 per year for that. If you want to enter retirement in 25 years with $800,000, you'll need to save around $10,000 per year for that, too.

Everyone's numbers will be different. The key is to take the time to estimate how much you need to save in order to meet all your financial goals -- and then to devise a plan to reach those goals and stick to it.