Retirement is Top Priority. College Comes Second
Published on Apr 05 2010 // Written By Tushar Mathur // Personal Finance, Retirement
It’s only natural: you want your kids to have it better than you did. So how do you balance paying for college and investing for your retirement? Collective wisdom says retirement is your top priority, if not your only priority. Selfish? Not at all. Look at some of the pros and cons:
Why retirement is your top priority:
- No one but you can fund your retirement.
- No grants, no scholarships, no low-interest loans.
- Run short of funds in your golden years? Your options may be limited: keep working (if health allows), reverse mortgage your home or get help from family.
- 20-plus years of retirement costs more than four years of college.
- Like most investing, the more time you have, the more growth potential and dividend reinvestment you may get.
Why college comes second:
- Your kids can help. Teach them early on to save and invest – some of each allowance, birthday check or paycheck.
- Friends and family can help, too. Suggest college fund money when you’re asked for gift ideas.
- There’s already money out there. Apply for financial aid, loans, grants and scholarships. (Perhaps even take out loans yourself.)
- Kids can work, too. Expect them to work summers in high school and part-time during college and make them put a big chunk in a college savings account.
- You and your kids have options. Have kids take classes part-time while working, look into less-expensive schools and consider commuting vs. living on campus.
- Remember the saying “Pay yourself first”? We’re not saying you can’t help your kids – just make sure you’re not shorting yourself.
