Review all your options, seeking a solution that allows you to do both.
Parents often find themselves managing competing financial needs. And the decision of how to
“I hear this debate a lot,” says Matt Forsman, a Thrivent financial associate in Bloomington, Minnesota. “It’s certainly common to value investing in your children, wanting to do what you can to support them, especially when it comes to reducing student loans.”
As Forsman talks with clients, he finds that many believe there are only two choices: let their kids fend for themselves (borrow money for college) to preserve their own retirement or raid their own retirement fund (or put it on hold) to support their children’s education. The reality is, it’s often easier to focus on the financial need in front of you. But as you get older, it’s harder to make up for not
“It’s important to remember that you can borrow for college; you can’t for retirement,” Forsman says.
Forsman, who speaks from his own experience of graduating from a private college with debt that was three to four times the national average even with help from his parents, tries to help bring clarity to his clients’ retirement picture. It’s important to balance the competing things, he says, so you can make an informed decision based on what you truly can afford.
“Talk with your
Plus, there are a variety of academic, admissions and financial strategies to help save on college costs. Those opportunities don’t exist for retirement, he says.
When you fly, Forsman says, the airline attendant reminds you that if the oxygen masks are needed, it’s important to put your own mask on before helping the person next to you.
“That’s hard for parents to hear; it’s a strong visual,” he says. “Saving something for your children’s education may be important to you, and you can do it, but making sure you’re on a good path to retirement should be the priority.”