Ultra responsible parents start saving for their children's college tuition the moment they're born. But how much do they need to save? Fidelity provides a really nice explanation. The numbers, however, are staggering.
Here's a chart from Fidelity:
This is simply incredible. These estimated mostly payments would run from a child's birth through his or her third year of undergraduate education -- about 21 years. The chart assumes a family's income will grow by 1.5% per year. It also already takes into account a healthy amount of financial aid through grants, scholarships, and family gifts.
Still, parents with a combined income of $55,000 would have to dedicate 9% of their pay to a 529 account. If their combined income is $100,000, then the payment is still 5.5%. If they have two kids, double that, and so on. Oh, and those percentages are of gross income. The families still need to pay their taxes, medical insurance, housing, food, and any other living expenses. They would also presumably want to be saving for retirement for those 21 years.
Obviously the burden is smaller for public universities, but it's still pretty significant. For a family with three kids that would mean around 10% of their income will need to be set aside in all three of these income segments.