The rising cost of college is a concern for every parent. So naturally we get a lot of questions about how to best save for college.
Our answer may surprise you. We tell clients the same thing you hear in those pre-flight instructions about oxygen masks. Take care of yourself first, then assist your children.
Make saving for retirement your priority. You can get loans and financial aid to help pay for college. But you can't borrow to fund your retirement. And we’ve found that if you fully fund your retirement savings each year, it puts you on a firm financial footing – which then makes you better prepared to help your children with college expenses.
Typical questions parents have about college funding include:
- Should I invest in 529 plans?
- What about education IRAs?
- How do my investments affect financial aid?
- Should I take out loans or should the children take loans in their names?
- Does it make sense to tap the equity in my home to help finance education?
- Can I borrow from my retirement plan to help fund college?
We can answer these questions, and more, as part of our comprehensive financial planning that takes a look at all of your financial needs, not just planning for college.