College Vs Retirement
College vs. Retirement
For most people, investing in mutual funds is pretty straight forward. You have specific goals that need to be met. You and your partner are approaching mutual fund investing with your eyes open and you're both on the same page. Granted, she may want that pretty cottage down by the lake and you want that new speedboat, but both your goals involve water, and that's close enough for you. But what if you're in a completely different boat? What if you know you need to invest, but you have two equally important goals pulling you two different ways? This is the case with thousands of parents who see the need to save for retirement but also want to save for the kids' college education. How can you do both at the same time? Here are a few tips.
One of the biggest factors in the college vs. retirement battle is the fact that people are putting off having kids until later in life these days. Fifty years ago, this wasn't the case, and saving for both college and retirement usually happened during two distinctly different phases in one's life. These days, now that we realize that saving for retirement is something that should be started when you're 18, not 48, the two overlap more than ever.
The gut instinct of most parents is to put the kids' future ahead of their own and cut back on retirement savings in favour of college. While this is a popular choice, it really only should be a last resort. A technique that is becoming more and more popular with parents who face saving for both at once is offering your prospective college student the chance to get matching funds from you. This is simply the idea that for every dollar they pay for, you'll match it. If your not sure how junior will pay for half, remember, there are many ways for teenagers to save for college themselves. Almost everyone qualifies for student loans, there are scholarships for good grades as well as an after school and summertime job. Most college students work while they are attending classes, as well.
While walking the tightrope of saving for two goals at once can be stressful, a logical and determined approach to the situation is really the only way to go. Choosing retirement over your kids' education isn't a “wrong” choice, and neither is choosing college over retirement. Everyone's situation is different and you need to make the right choice for your situation.
More Articles
Investing During An Unstable Market
How Does Capital Gains Tax Affect Me
List Of Mistakes Investors Make
Kicking Butt In Mutual Fund Investing
Where Can You Buy Mutual Funds
More Articles
... still be paying off your college loans, getting an idea of how much school will cost for them is a valid concern. Taking a look at the cost over the last few years, prices are continuing to go up. While the average increase per year is about 5 percent, from 2003 to 2004, public universities and colleges ...
List Of Mistakes Investors Make
... rush to be a part of the exciting and profitable world of mutual fund investing, many investors make mistakes. It's human nature and nothing to be ashamed of, but they can and should be avoided. Here are a few helpful tips in avoiding the common mistakes that many other new investors make. First off, ...
What Is A Prospectus And How Do I Read It
... they think it will do. When you open the front cover to a prospectus, they usually hit on three different topics right off the bat: the fees that this fund charges, the objectives of the fund and the performance of the fund. While there are other concerns when you look at a prospectus, these three things ...
Kicking Butt In Mutual Fund Investing
... them at a minimum is very important. Try to stick to no-load mutual funds, they have fewer fees than load funds. Also, watch the management fees that a company charges on their funds. These vary a lot from company to company. Have a good idea what the tax implications are on your mutual funds. There is ...
... beginning and ending fee, but they do have an annual fee that can fluctuate depending on the fund contract you signed. All mutual funds, regardless if they are load or no load, do come with a management fee. This is like a commission that is paid to the folks that manage your fund and help it make money. ...