Jack and Jill are 41 years old and plan on retiring at age 65 and expect to live until age 95.

They currently earn $200,000 and expect to need $100,000 in retirement. They also expect that Social Security will provide $24,000 of benefits in today’s dollars at age 65.

They are saving $20,000 each in their 401(k) plans and IRAs. Their son, Parker, is expected to go to college in 10 years. They want to save for Parker's college education, which they expect will cost $25,000 in today’s dollars and they are willing to fund 4 years of college. They were told that college costs are increasing at 6% per year, while general inflation is 3%. They currently have $500,000 saved in total and they are averaging an 8% rate of return and expect to continue to earn the same return over time. Based on this information, what should they do?

a. They have saved enough to fund retirement and Parker's education and can stop saving if they wish.

b. They are doing just fine and should continue doing what they are doing.

c. They need to increase their annual savings by about $12,000 now if they want to fund college in addition to retirement.

d. They should increase their annual savings by about 10 percent and they should be fine.