Here’s a test: If you have $100 at the end of the month to put away for savings, where should you put it: into your retirement savings pot, or, if applicable, your college education savings pot for your child? According to one financial expert says retirement savings should be your priority.
As reported recently in USNews.com, financial expert David Ning warns against helping to fund your child’s education and tuition if it risks your retirement savings. He says there are a few reasons why:
1/ Making your child pay their own way helps them develop the skills for financial management, and appreciation for the value of a dollar.
2/ Many student loans are low-interest or interest- free, unlike mortgages or other loans you may be on the hook for.
3/ Your child may be able to pay their loan over a longer period of time, whereas you may not have that luxury.
4/ If the bulk of your savings go to your children, you may be doing them a big disservice by being totally dependent on them financially when it comes time for you to retire
What do you think? Is it better to save money for your own retirement, including a potential move into an assisted living community in the future, or to help your children pay for their education?