Parents usually have two big things they need to save for: Retirement and college. It can be a tough choice where limited money goes, so here is our advice:
Retirement first.
To some people this probably seems counter intuitive, but there are a couple of good reasons that it’s the right choice.
- Retirement costs more. It takes a lot of money to retire in America today, and if you’re ever planning on doing so you need to save up a ton of money.
- Retirement lasts longer. College is a few years, retirement should be a lot longer. Even marginal increases in retirement accounts can translate into big differences.
- College has more options. You’ll never find a retirement scholarship, but you will find lots of college ones. Remember that there are a lot more options to fund college than there are your retirement.
Your financial planner will probably tell you something similar, but if you need us to try to talk you into retirement savings, we’d be happy to give it a shot.