Set Your Goals and Start Saving

When is a good time to start saving?

Whether your child or loved one is an infant or teen, the sooner you get started, the better chance you have of reaching your goal. Right now is a good time to start.

While you may not be able to contribute as much as you would like, it's important to start saving something now. Start small, and as your financial situation changes, you can reassess whether you are investing enough to meet your college savings goals.

Once you start saving, make it a habit. Making regular contributions – however modest – may give you the best chance of reaching your goal.

The more you invest and the earlier you start, the more your money has the opportunity to grow

This hypothetical example illustrates the future values of different regular monthly investments for different time periods and assumes an annual investment return of 6% with an initial investment of $2,500 and no withdrawals during the relevant time period. It is presented for illustrative purposes and does not reflect actual performance or predict future results and does not reflect any deduction for expenses or taxes or the benefits of any state tax credit that may apply. Account values will fluctuate with market conditions and the specific investment options selected.

As the chart illustrates, the sooner you start, the sooner you can take advantage of the compounding effect of time on your investment. Contributing the same dollar amount to your account regularly can be an effective investment strategy and may also help you lower the average cost of your investment. Of course, no method of investing can prevent market risk. Investment return and principal value will fluctuate so that when withdrawn, your investment may be worth more or less than the original amount invested.

The previous chart shows the advantages of starting early. This chart uses similar assumptions to illustrate the cost of waiting. This hypothetical example assumes 12 contributions per year with an annual rate of return of 6%. To reach a savings goal of $100,000 requires contributions of $256 a month if you start when your child is a newborn. Waiting 8 years to start saving means you will need to contribute $607 a month to reach the same savings goal.

What happens if you start saving late?

The illustration assumes no withdrawals during the investment period. This information is presented for illustrative purposes only and does not reflect actual performance or predict future results. Account values will fluctuate with market conditions and there is the risk of investment loss.

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