In a nutshell, that encapsulates the bottom line of the saving for college vs. saving for retirement question. Kids have options for college, but it’s not like the options are quite there when people are older and needing money for retirement.
It’s been written before about how 2/3 of workers have less than $50,000 saved for retirement. This is, quite simply, and eye-popping figure. Think about how long $50,000 will really last in retirement? Not too long, right? Well, given that this is what so many people are apparently starting at, it makes a person wonder how college savings come into play in those situations.
Ah, but those college expenses can’t be ignored. Tuition seems to be going up at super-high rates that aren’t exactly trailing inflation. Plus, let’s face it: in a competitive job market and a now global market for talent and skills, it’s different than a generation ago where someone with a high school diploma and willingness to work could carve out a middle-class lifestyle. Education sure seems more important now than ever. With a master’s degree, I’m just one of what’s likely millions possessing just the same accomplishment.
So if presumably so many people aren’t able to save, and education is getting more important and more expensive, what should a person do? As a parent, what do you prioritize?
Well, there is no suspense here for my opinion as I’ve stated it above. Now, I do think that if people can balance both, then that makes sense. After all, who doesn’t want to give their child a good foundation in life? As a big proponent of education, and someone who views kids as the most important responsibility in a parent’s life, I see the value here.
But apparently, not everyone is in a position to fully put their kids through school. Therefore, children have to make the effort to earn the money to pay for their own education, especially in situations where their parents can’t afford it. Every university will have a list of available scholarships, grants, and loans on its website, making it easy for students to take responsibility for their own education. In addition, many schools offer tuition awards to successful students. Those who earn these awards will have their tuition costs reduced the following year, alleviating some of the financial pressure that is associated with putting a child through university
As hard to imagine as it may seem for many people, it’s not the norm for the general populace.
I think that if someone is in a less than favorable position when it comes to their own retirement savings, they really need to be sure to focus on those savings as a priority. Then, they can do everything within their power to help instill values of hard work and determination into their kids. Choosing a school that makes financial sense, while limiting student loans, can be a huge help. Whether its scholarships, living at home, or working while going to school, there are options.
Again, I’m not saying that all people shouldn’t help to pay for their children’s college educations. That would seem silly, at least to me. People who can afford to pay their kids educations in full are really doing well by them, and setting them up nicely to get a good start in life.
However, when parents are not going to be able to afford their own retirement, they have to prioritize and balance. For those folks, I say that retirement comes first.
Okay, what do you think?
What is your view on retirement savings versus college savings?