You can’t put retirement on the back burner for college funds
Unfortunately, this happens to a lot of parents nowadays. With how expensive college has become, a lot of us face the problem of being stuck between helping our kids with their college payments and trying to save for retirement. However, as tempting as it sounds, you shouldn’t be neglecting your retirement fund just because you want to help.
Putting a lot of money into a college fund but none into retirement savings is probably one of the biggest mistakes you can make. Of course, we aren’t saying that you shouldn’t help your kids out. But you should see what you can do and how much you can afford to help and pay, while the rest can be covered by scholarships, loans, and other benefits.
Believe us, it will be hard, but the truth is that very large college funds will not help you at all when it comes to retirement savings. You may end up not being able to raise enough money to live comfortably if you start putting money away just after your kids go to college.
3 Responses
A lot of truths were spot on. Disappointed to see that there was no mention of Medicare Advantage Plans available from numerous major insurance companies that will pay a lot more than straight Original Medicare. Copay’s are modest and mostly all costs are fully paid when you hit the maximum out of pocket level. There is also the Gap coverage option. This is important info that should have been included.
My spouse and I waited until age 70 to start collecting social security which has made a big difference for our long term plans. The 8% increase per year for the four years after our age 66 regular retirement age gives us 32% more.
We have a moderate LTC plan which has a reasonable rate which will help IF we need it later in life.
This article does not address the federal taxes you will have to pay on those benefits based on ridiculous levels of income that have not been adjusted for years.