how to calculate college contribution for the following clients

 

Clients information

Martin & Kathleen

Martin's Age 58, plans to retire at age 68

Salary $150,000 with expected 4% raise per year

Wife's name Kathleen: Age 45 Plans to retire at age 68

Salary: $75,000 with expected pay increase of 2% Annually

They have the following children:

Jon age 16, Sarah age 14, and Randall Age 10.

Average Federal tax rate percentage: 10.54 %

Average state tax rate percentage: 4.23 %

Martin and Kathleen would like to pay about half of the college education for Jon and Sarah. They do not anticipate Randall going to college as he has special needs.

They estimate this will currently cost $12,500 per year for each child - based on $25,000 current tuition. Tuition inflation is expected at 6%. They currently have not save any money for their children's college contribution fund.

Calculate the monthly contribution and show step by step how calculations were done.