How to Balance Retirement Savings and College Tuition

August 27, 2021

If I had a dollar for each time a financial advisor told me that children can borrow money for college but their parents can’t borrow for retirement, I’d be retired already. They’re right, though. No one will lend you money to ride off into the sunset — at least not at terms you could stomach. So what does that mean, in practical terms? Prioritize your retirement savings over saving for your children’s (or grandchildren’s) education. It’s easier said than done, of course. Parents want to give their children every advantage, and a debt-free education is a gift. But if it comes at the expense of your retirement security, that’s a heavy price to pay. If funds are lacking, you can help do homework with your child on grants and student loan terms. Today’s edition looks at 10 tips for paying for college this fall.

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What are you up to these days?

About a year prior to retirement, my wife and I upsized to a larger, newly constructed home close to my son and daughter-in-law so we could spend lots of time with grandchildren. I volunteer in the community weekly to provide food to needy residents and also speak to middle school students encouraging them to get a good education by staying in school. When the pandemic struck in 2020, we spent many hours assisting our two grandkids each day during remote learning; it was very challenging to get 8-and 10-year-olds to focus for that many hours! More recently, in Jan. 2021 I caught COVID-19 and was seriously ill and isolated in the hospital for 18 days. Many of my former hobbies, such as flying model airplanes and other fun activities, have been on hold since then. If I had been clairvoyant, I would have chosen to retire somewhat earlier and spent more time enjoying travel, physical activities, hobbies, and personal development. 

Wish we had crystal balls! Any advice you'd like to share for others about preparing for/living in retirement?

As a technical person, I’d kept detailed records of income sources, expenses, and types of savings for short, intermediate, and long-term goals for many years. Four years prior to retirement, I selected a fee-based financial advisor to help us plan holistically — not just for investments but also for many life elements, including new ones coming in retirement. Examples are estate planning, establishing a revocable trust, acquiring various types of insurance, health coverage, and long-term care, and end-of-life asset modeling based upon lifestyle options and our risk acceptance profile. Even though some think this an expensive choice, it has proven to be a great resource for me since I’m now aware of so many key elements I should be managing, and my wife is much more confident that she will be taken care of as we age. 

Smart investment! Please tell me something (or someone) that you're grateful for.

I am most grateful for the superb and extensive education I received (24 years from kindergarten through post-doctoral fellowship) that taught me critical thinking and how to compete in a world experiencing exponential growth in technology and complexity and now in highly divisive issues where honest-information brokers are difficult to discern. Through graduate school and early employment, my wife has been my life partner in celebrating my successes and in commiserating on my failures and challenges. I always communicate with Darlene on major financial decisions so there are never any surprises — even good ones! On the few occasions of disagreements, we’ve worked out compromises acceptable to both of us since we’ve developed mutual trust.

Retirement News From Around The Web

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Companies expect job candidates to ask for more. NEXT AVENUE

Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at elizabeth.obrien@money.com and follow her on Twitter at @elizobrien.

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