Should I Save for My Retirement or Kids’ College First?

Should I Save for My Retirement or Kids’ College First?


So a common question that I receive, especially
from parents of younger children, is, “should I save for my own retirement first or should
I prioritize my child’s education first?” Your own retirement is going to last, hopefully,
20, 30 years. So it’s a much bigger goal than a child’s
education, which could be four years, six years, eight years I guess if they’re going
to become a doctor. When looking at a big goal like retirement,
what you want to look at is what is the backup plan? If you haven’t saved for retirement, you have
not built up and are not on track for your own retirement, there really isn’t one. Now, for your child’s education, if you have
not saved for it, what’s the backup plan? Well, the backup plan can be a scholarship,
maybe it can be your child working, it can be grants, It can be college loans. There’s other opportunities to fulfill that
need for that child’s education. Also, you want to take it from, maybe think
about it from your child’s point of view. If you gave your child the choice to have
a fully funded four year college education, but the cost of that would be you don’t have
your retirement saved for, so that when you’re 75 years, 80 years old, maybe you come knocking
on their doorstep and now you are in their debt in retirement. I’m going to tell you, they’re not going to
be very interested in that. So you’re going to want to take care of yourself first. Your own retirement is going to be the priority. If you are in a good space and you have your
retirement on track and you can still save for your college education for your children,
I highly recommend that you do so. There are plenty of options out there: you
have 529, there’s Coverdell IRAs, there’s custodial accounts, there is prepaid tuition. There are a lot of choices out there. And if you are interested in the differences
between those choices, go to PureFinancial.com and we have that listed out. You can check out a few of the other videos
we’ve done on that topic itself.

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