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Which Comes First—Retirement Savings or College Fund?

Parents who start planning for their kids’ future education costs early are smart, and people who begin planning for their own retirement decades down the road are really smart. But the big question comes when parents are trying to set aside money for both; is it better to put savings into one account than the other, or to simply divide the amount you’re able to contribute to both equally?


Erin Eddins of My Edmonds News reported on this very debacle and lent some insight into why she believes it is wiser to contribute to one’s retirement first and foremost. Eddins pointed out that college students can apply for grants, loans, and scholarships to help fund their education but that one’s retirement rests on their shoulders alone. She also reasoned that college students tend to start making better money after they graduate college, allowing them to pay off loans they incurred, but there are no loans for retirement and most people do not have an increase in cash flow coming in when they retire.


We think that Eddins has a point, but would encourage our readers to set aside at least a little money for college so that kids aren’t starting with absolutely nothing. It is good for kids to have summer jobs and part-time jobs in school so that they can pay for books and tuition; we truly believe that this builds character and instills a sense of pride for contributing towards their own education. You could even set it up so that you give each of your kids the same amount of money and tell them they are responsible for the rest, meaning that if they go to a private school they’ll be footing much more of a bill, but if they do a community college for awhile or a state school they’ll likely be paying far less out of their own money.


However you choose to break it up, keep in mind that retirement is an inevitable thing for us all at some point in our lives, and that there are many ways to juggle paying for a college education. Retirement savings are more cut-and-dry and should be something that you are continually contributing to, to ensure your financial stability later on in life.