Balancing Children's College Tuition & Retirement
Many parents struggle when it comes to deciding how to lay aside funds for both college and retirement.
Some questions to consider:
- How long until you retire?
- How financially prepared are you for retirement?
- How long until your children attend college?
- What is the projected total cost for college?
Points to consider:
- Parents should review their current budget. Are there adjustments that need to be made to free up funds for college savings?
- Few pay the full college list price. Most receive some form of scholarship. A 2015 study suggests 90% receive some form of financial aid reducing the cost on average 54%*
- The costs of a 4 year degree vary widely depending on the school your children plan to attend. Take a look at in-state, out-of-state, public and private options. Then set expectations with your student, based on your budget, well in advance of the time when he or she begins applying for acceptance.
- Parents don’t have to fund the full cost. Establish a percentage of the cost that you are comfortable with and stick to it.
- The conversation about funding college is a great way to teach your children lessons about wise financial decision-making. When both parties are allowed to share their expectations, a path can usually be found that satisfies all parties.
One last thing to remember: there is no financial aid for retirement ,so it takes precedence over funding college. Short-changing your retirement could lead to many regrets down the road.