| Retirement or College Education? |
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ecrcg
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| Retirement or College Education? |
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Any advice gladly appreciated.....My husband and I are trying to determine how to earmark our incomes. We are torn between saving to help our children pay for their college educations (they start in the next few years) and saving our funds for our own retirement. I hate for the kids to start out under all kinds of debt, but I don't want to work until I'm 80 either. Any reliable sources to direct me to balance this  ??
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Sat Apr 07, 2007 3:31 pm |
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muneebgs
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You can not borrow for your retirement, but you can borrower for your education....over 60% of babyboomers believe they should pay for their childrens education, and as a result put themselves into a financial bind as they get closer to retirement age!
Federal student loans (Stafford, PLUS and Consolidation) are there to be a help, not a hinderance. If you need them, use them, but as with everything else, make an informed decision about what you are doing.
My suggestion is to always look for a non-profit lender in your state as your first choice. You can get a list of non-profits in your state at www.efc.org.
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Tue Apr 10, 2007 4:35 pm |
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No-Brainer
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I have helped several of my kids get through college, but I haven't paid for a single one directly. I have also seen too many of their friends that DID get a free ride and what effect it had on them. I know your kids are different, but are they really?
Appreciation for what you're getting is part of the college experience in my opinion and how can you appreciate something that comes so easy? Make them earn it.
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Wed Apr 11, 2007 1:31 pm |
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Case-Face
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Who really wants to HAVE to work until their 80? Not most of us! Fund your retirement, and whatever you can spare give to the kid's college fund. But to be honest, if they're already going to start school in a few years, saving really doesn't matter. Financial aid, scholarships, and inevitable loans will have to fund them. I did all of the previous means and I'm still able to feed and clothe myself, pay the rent/bills, AND pay off my loans. That's just life unless you're wealthy...
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Thu Jul 19, 2007 3:53 pm |
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more freedom
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What you can do is that you can invest your money wisely, then use your profit from your investment portfolio to pay for your college fees
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Sat Aug 18, 2007 3:03 pm |
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Fern123
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Always fund your retirement first.
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Mon Aug 20, 2007 8:42 pm |
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dstern
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Location: UK
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Here's a suggestion: why not make a deal with the kids, use the money rather than take out a loan and in return they'll fund your retirement.
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Fri Sep 14, 2007 10:14 pm |
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Apollo
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| Re: Retirement or College Education? |
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Nobody wants to work until their 80 but you don't want to rely on SS when your retired either.
I would not recommend to take away money which you had planned to save for retirement and to divert it to other sources. You can borrow funds for your kids college education but not for your retirement.
The rest really depends on how much the two of you earn?
Here are a few suggestions (if you are able to execute them financially):
1. Fund your retirement as you have planned. Do some research as there are plenty of ways to safe for your retirement. I would suggest more then just one option (once again it depends on how much money is available)
but your employers 401k is a decent start.
2. If additional funds are available I would open a money market account and put the additional funds in there for your kids college education.
3. One thing you may want to consider is to invest some of your money which you intend for your kids college education. It carrys additional risk but with the right investment strategy and/or advice you would end up with more money then compared to the money market account (this really depends on how much money is available and on your preference).
Avoid the mistake many people make and remember:
Don't take away from your retirement funds now as you won't have them when you really need them.
It is not smart to play it safe but it is safe to play it smart.
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Sat Sep 15, 2007 3:10 pm |
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efflandt
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Location: Elgin, IL USA
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I am a baby boomer and paid my own way through college, except for portion contributed by an uncle. It may have taken me 5 yrs, but I worked full time the summer I graduated from high school and 2 yrs after that, then part time during school and full time summers. I went to a local university, so no housing expenses.
Of course tuition was less then, and with WI state tuition grant and discount for my sister or brother attending the same university, it only cost me about $700/semester for engineering school. So $1200 earned during summer would just about cover it. When I graduated and started my first full time job, my only debt was $200 borrowed from my dad towards security deposit on an apartment.
If you can contribute towards their education, fine. But there are financial aids available for schooling and sooner or later they need to learn to earn what they spend. They are under no obligation to finance your retirement, so don't short change your retirement to give them a free ride. They should be happy with whatever they get when you pass on.
If you have a surplus during retirement, pass it on early. Better that than running out of money.
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Sat Sep 15, 2007 9:48 pm |
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oldguy
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As everyone says - retirement has the priority - the best gift for your kids is to not have to worry about putting their own families on hold to pay for your care when you're 80 or 90.
Get the student loans - then your family will be paying for the college over the 20 year period AFTER graduation rather than during the 4 years of college. The interest is almost nothing, a token %. But the time-value of money is involved, you'll be paying the loan back with cheaper dollars after many years of inflation.
As to who pays, that can be the child after graduation, it can be you, or it can be shared maybe 50/50. But no matter who pays, take advantage of the time factor.
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Sun Sep 16, 2007 2:46 am |
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