Juggling Retirement and College Savings
Most parents want to pay for their childrens college education, or at the very least assist in paying for college. While it would be great for your kids to be able to start like after college without student loans to pay off, the cost to oldsters may be too high.
The average annual price of a -year public college is $1,1 (source: The College Boards Annual Survey of Colleges, -), with -year private schools averaging $, annually. College costs have been outpacing inflation by rising over % each year.
On the other hand, saving for retirement is becoming even more important as companies have started freezing or eliminating pension plans, and the future of Social Security remains uncertain.
Paying for both college and retirement is going to be challenging for most parents. Here are a few suggestions to help you to achieve both goals:
Have a plan. You should determine how much you will need for retirement and how much you anticipate your kids will need for college.
Start saving as soon as possible. Time is the greatest ally, whatever your savings goal. Figure out how much you are able to save each month, and setup an automatic plan as soon as possible.
Prioritize if you cant afford to save for both goals, retirement should take priority over saving for college. Your children can always borrow for college or earn scholarships; you can not borrow money for retirement.
Save for both. Ideally, youd enjoy being able to save for both goals at the same time. If youre able to, allocate money to both goals. You may wish to visit having a financial planner to find out how much should be allocated to each goal.
Research there are many different types of college savings accounts available. Find out which type of account may benefit you the most before you decide to invest.
Use retirement accounts in order to save for retirement and college. Retirement accounts can be tapped into to help pay college bills (IRA withdrawals can be taken penalty free for college expenses; Roth IRA contributions can be taken penalty and tax-free). However, you should only do this whether it will not sacrifice your retirement savings.
The main point here to getting the most out of your savings – prioritize your savings goals, possess a plan in place, and start early.
For more information blacksburg va real estate Also Click the link for other websites the author enjoys Payson real estate