Save For College or Retirement?

The next time you're on an airplane, listen carefully when the flight attendant presents the safety instructions. What does she say to do if you need to use the oxygen? She tells you to put your oxygen mask on before you put the mask on your child. Why? Because you can only take care of your child if you've already addressed your most immediate needs.

Put yourself first.

That same advice applies when juggling retirement and college savings. Financial experts agree, even though college costs are soaring, most retirees will depend primarily on savings to fund their retirement years.

Once your child graduates, his or her earning potential gets underway in earnest, but after you retire, you’re living off your pension, social security, and savings. Thanks to improved standards of living, medical advances, and technology, retirement years can last for several decades. You want those years to be financially secure.

You know that you’re likely to spend more years as a retiree than your child will spend as a college student. That’s why financial advisors recommend that, unless your retirement depends on your children taking care of you during your golden years, you need to start saving now.

Start thinking college when baby is born.

Thinking only of yourself is not the answer either. Once you've accepted the need to plan for retirement first, your next focus is college for your kids. The earlier you start the college funds, the easier it will be. Parents who manage to save $300 a month from their child’s birth will have approximately $120,000 by the time their child is ready for college.

Funding your child’s college education can come from a variety of sources too. Be sure to check out your state's 529 plan or U.S. Treasury bonds. Check out this Wall Street Journal article for more information.

With today’s careful planning, tomorrow can be financially secure for you and your family.