If you’re a parent, you may well want to save for your children’s college education. But could this harm your ability to save for your own retirement? It is possible to work toward both goals — but you may need to prioritize by focusing more on your retirement.
Why? For one thing, your children will have more time to pay back college loans than you have to save for retirement. Also, by building enough resources to become self-sufficient in retirement, you’ll be less likely ever to need financial help from your grown children.
So, consider putting in as much as you can afford to your IRA and your 401(k) or other employer-sponsored retirement plans. But when you have other resources available, perhaps from bonuses or income tax refunds, or from freeing up money in your budget by reducing debts, you may want to invest these funds for your children’s education. One education savings vehicle is a 529 plan, which offers potential tax advantages and can be used for college and qualified trade school programs.
It might not be easy to save and invest consistently for your retirement and your children’s education — but it can be worth the effort.
This content was provided by Edward Jones for use by Linda Drake, your Edward Jones financial advisor, at (480) 985-2651. Edward Jones, Member SIPC