Money Monday: College or Retirement

Many people often start savings accounts for their children to attend college. This is a well-intentioned plan, but can hurt you in the long run. The most important savings that a parent can do is to save for their own retirement. Too often, we are able to help with college tuition, but when it comes time to retire we cannot. Both parents and children can take loans to help with college expenses, but neither of you can take out a loan for retirement. It is better to encourage your children to work and save their money for college and/or to take out loans for their education. Scholarships and financial aid are also viable options for a future college student, but again, I have yet to see a scholarship awarded simply for retiring. Companies no longer offer the retirement packages like in the past and social security may or may not be available when you are ready to retire, therefore it takes more money in savings to be able to afford retirement So, unless you and/or your spouse, plan on working well after retirement age, I suggest building up your own savings account before funding one for your child's education.