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Do You Fund Your IRA or Your Kid’s 529 Plan?
Lots of us have the same delimna. Should we save for college or a retirement plan. We have a limited amount of money that we can sock away, and of course, in an idea world we would save for both retirement and the kid’s college. But we know that we can only meet our goals by concentrating on one thing. So what should we do?
Jean Chatsky is an editor of More Magazine, and she says that retirement should come first. Is she telling us to be selfish? Maybe not. College loans, scholarships, grants, and work study programs exist for college. These programs are not available for retirement. She says to sit down with your kids and ask them if they would like to take some of the responsibility for their education, or if they would like to support you during retirement because you spent all of your money on them!
Also, people tend to value things more when they pay for them. If you child takes on some of the responsibility for finding college funding, either through filling out financial aid forms or using money from their own jobs, they will probably apply themselves more in school!
Now, neither of us are saying that you should not give your kids any money. Grades are important, and you want them to worry more about reaching for a high GPA then making minimum wage at Burger Barn. If you have a good retirement savings plan, then you can probably help them out during college years without sacrificing your golden years. Just use some common sense.
college saving, retirement saving, college vs retirement
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