SIOUX FALLS, SD -
Do you fund your own retirement or pay for your child's education? A new study
finds that parents often see their child's tuition bill as equal to, or more important than funding their own retirement.
But if you don't put your own retirement first, your kids could end up paying your medical bills instead of their student loans.
The rising cost of college and increase in student debt load has many parents torn between funding their child's education or their own retirement. But financial planners say don't sacrifice your savings for your child's tuition.
"Your retirement is ultimately the most important thing because the dollars that kids can get on Pell Grants and students loans is such a low interest rate right now, they can afford to pay those back once they get a job. But you can't go back and save for your retirement 15 years," financial planner Rob Huber said.
Huber says parents don't have the luxury of time, while their children do. And most kids can handle the payment.
"It's a tax write off as well; the interest they pay on the student loan is a tax write off. If they just manage it; probably living in an apartment or affordable home, adding on a student loan payment isn't going to kill them," Huber said.
Huber also says many parents don't face the issue until their kid’s college is staring them in the face, and they need to start saving much sooner for both retirement and college.
"You've got to do both and you've got to start when they're born. I hate to say it. You need that 18 years to get into bigger dollar amounts or get that nest egg built up," Huber said.
In the survey, low-income households were most likely to say they would pay for their children's college over saving for retirement.
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