College vs. Retirement by mydocstocdocs9


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									College vs. Retirement

For most people, investing in mutual funds is pretty straight forward. You have specific goals
that need to be met. You and your partner are approaching mutual fund investing with your eyes
open and you’re both on the same page. Granted, she may want that pretty cottage down by the
lake and you want that new speedboat, but both your goals involve water, and that’s close
enough for you. But what if you’re in a completely different boat? What if you know you need to
invest, but you have two equally important goals pulling you two different ways? This is the case
with thousands of parents who see the need to save for retirement but also want to save for the
kids’ college education. How can you do both at the same time? Here are a few tips.

One of the biggest factors in the college vs. retirement battle is the fact that people are putting off
having kids until later in life these days. Fifty years ago, this wasn’t the case, and saving for both
college and retirement usually happened during two distinctly different phases in one’s life.
These days, now that we realize that saving for retirement is something that should be started
when you’re 18, not 48, the two overlap more than ever.

The gut instinct of most parents is to put the kids’ future ahead of their own and cut back on
retirement savings in favour of college. While this is a popular choice, it really only should be a
last resort. A technique that is becoming more and more popular with parents who face saving
for both at once is offering your prospective college student the chance to get matching funds
from you. This is simply the idea that for every dollar they pay for, you’ll match it. If your not
sure how junior will pay for half, remember, there are many ways for teenagers to save for
college themselves. Almost everyone qualifies for student loans, there are scholarships for good
grades as well as an after school and summertime job. Most college students work while they are
attending classes, as well.

While walking the tightrope of saving for two goals at once can be stressful, a logical and
determined approach to the situation is really the only way to go. Choosing retirement over your
kids’ education isn’t a “wrong” choice, and neither is choosing college over retirement.
Everyone’s situation is different and you need to make the right choice for your situation.

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