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Family Financial Planning

Planning For College and Retirement At the Same Time

Perhaps you have already gotten your college degree in hand. You have worked in your particular industry for some time and have begun to think about how you can save your money for retirement. At the same time, if you have a child or grandchild that is headed towards their college years, then perhaps you will also need to consider how to save for college to better help that child maximize his or her future.

There are numerous investment vehicles that can be used for retirement purposes that are also beneficial to use to save for college purposes as well. For example, many people use annuities to save for their retirement goals. This can also be something that is used to start saving for college. Monies in annuities are tax-sheltered and can be pulled out to pay for or at least supplement the cost of college. The great aspect of utilizing annuities in this fashion is that these funds are usually not assessed as assets when calculating qualifications for financial need for the students, and again, they offer wonderful tax advantages. You can gain more grants and scholarships for college on top of the benefits of the products themselves.

The second investment vehicle which can be utilized in a similar fashion to help pay or offset college expenses is life insurance. Monies in whole, universal, and variable life policies are not equated as assets in college financial aid calculations, and all of these life insurance investments offer the flexibility of funds being pulled out tax-free at anytime they are needed, offering tremendous advantages for both college and retirement planning. Once again, these are extra benefits you receive simply from purchasing them at the right times.

Most financial experts will tell you that it is important that you do not put the goals for your children ahead of your own financial goals for retirement. As much as parents and grandparents seem hardwired to do anything and everything for their children, it can be backwards to put college savings for children ahead of both current and retirement savings goals of the parents. While parents may be able to save enough for their children to go to college, they may be putting a big burden on them in the future if they have not saved enough for their own retirement. As indicated above, both admirable goals of planning for college and retirement can be accomplished simultaneously without sacrificing one or the other.

It is important to try to meet with a financial expert who does work in both the college savings and retirement savings fields. This expert will be able to guide you on a more personalized basis about what kind of investments you should be making.

Many experts will suggest that you invest in things that are relatively safe and conservative. They will recommend that you try to keep most of your money in investments that pay dividends and can make large returns for you over the long run. There is no need to get involved with quick return types of investments since they can be extremely volatile, not necessarily advisable for long-term financial goals. Of course, each individualís and familyís situations are unique and must be analyzed as such.

Your expert is your guide for your financial life. They can help you feel relaxed and well-prepared for your future. This is a comforting place many people are not able to get to on their own. Now that you know that you need to balance both college and retirement planning, the sooner you begin the better.

   

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