HOW TO KEEP YOUR RETIREMENT AND PAY FOR COLLEGE
One issue we hear many of our families say is that they won’t have enough money to retire if they pay for their children’s college educations. They get stuck between a rock and a hard place because they don’t know how to give their children what they need to better themselves without sacrificing their ability to enjoy their senior years. I decided to write this blog post to explain how to be able to achieve your retirement goals while sending your children to college.
First, prioritize. You can’t take loans for retirement, but you can borrow for college. Now, I know that taking loans may not be your goal in how to fund college, but this statement should be understood because you should be aligning your priorities with where you need to save money the most. Save your money for yourself (401k, IRA, etc.) knowing that you have to set yourself up for success. Plus, if you save money in an account for your child (like a 529 Plan), then the money in that account can be assessed at a much higher percentage when awarding aid. Money saved in the parents’ names is much better for securing need-based aid.
Second, research. Not every college is created the same… especially when it comes to financial aid. If affordability is important to you, then you should spend time researching college’s financial aid programs. Some schools offer significant discounts for grades, socioeconomic class, unique abilities, etc. Spend a good amount of time asking colleges about their school-based scholarships and grants. This is the free money you don’t have to pay back, so it will help you to understand actual cost versus sticker price.
Third, counsel your children on college. Students often tell us they want to go to college in order to have more opportunities for jobs. That is wonderful, but know what job. You may think your teenager can’t pick a career at the age of 16, but he/she should try. If your child goes to college while you pay money for him/her to figure it out, it could cost you. What if that school doesn’t have the major your child needs? He or she could lose credits and valuable time trying to transfer. What are the networking abilities within the alumni association for your child’s industry? You need to pick a school that aligns with your child’s career goals in order to spend your money wisely.
This is a quick list but I hope it helps! Of course, we go into much more detail in our individual planning strategies but this will give you a jump start on the process. For more information contact us.
