Tough Choices: Helping Parents Save for College and Retirement
Journal of Financial Planning (06/01) Vol. 14, No. 6 p.68; Opiela, Nancy

Financial planners offer practical advice to parents trying to plan both for their retirement and their children's education. Given that tuition for a four-year private college is estimated to cost $257,000 by the year 2019, most planners advise parents to give their retirement nest egg priority over their children's education fund. They base this decision on the fact that more children today are starting to bear the financial responsibility of their education. If that line of logic fails to persuade their clients, then planners appeal to their fears, warning that parents who do not put their retirement plans ahead of their children will likely become a burden to them in their later years. Advisors try to alleviate some of the pressure by helping their clients to identify their priorities. Doing so helps to crystallize the individual's or couple's economic outlook and make decisions according to their situation. When it comes to specific tools and saving strategies, planners say flexibility is the key to planning for college. Products such as the Roth IRA, the 529 plan, and the Uniform Gift to Minors Act all afford flexibility in college savings plans.


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