Strike
a
balance
between
saving
for
retirement,
college
If
you
have
young
children,
you
may
want
them
to
attend
college
someday
and
you
may
want
to
help
them
pay
for
it.
At
the
same
time,
you
also
need
to
save
for
a
comfortable
retirement
lifestyle.
Are
the
two
goals
compatible?
There’s
no
easy
answer
to
this
question.
But
one
thing
seems
clear:
For
many
parents,
saving
and
investing
for
their
children’s
future
is
every
bit
as
important–and
maybe
more
so–than
saving
and
investing
for
their
own.
In
fact,
two‑thirds
of
parents
said
they
would
postpone
retirement
if
necessary
to
help
pay
for
their
children’s
college
education,
according
to
a
survey
by
Alliance
Bernstein
Investments,
Inc.
Parents
have
good
reason
to
believe
that
investing
in
a
college
education
will
pay
off
for
their
children:
Over
the
course
of
their
lifetimes,
college
graduates
will
earn,
on
average,
about
$1
million
more
than
high
school
graduates,
according
to
the
U.S.
Census
Bureau.
So,
since
a
college
education
appears
to
be
quite
valuable,
shouldn’t
you
do
everything
you
can
to
help
pay
for
it?
Ultimately,
you’ll
have
to
weigh
your
potential
college
contributions
against
your
need
to
save
for
your
own
retirement.
On
one
hand,
you’d
like
to
help
your
children
as
much
as
possible;
as
a
parent,
you
don’t
want
your
children
saddled
with
enormous
debts
when
they
leave
college.
But
on
the
other
hand,
that
type
of
reluctance
may
be
based
more
on
emotion
than
on
a
sound
financial
strategy.
After
all,
college
graduates
seem
to
find
a
way
to
eventually
pay
off
their
loans.
Furthermore,
your
children
may
be
able
to
find
grants,
scholarships
and
work‑study
opportunities.
Many
students
can
earn
a
decent
amount
of
money
at
summer
jobs,
too.
Nonetheless,
you
still
may
feel
obligated
to
pay
something
toward
your
children’s
college
education.
But
if
you’re
going
to
help
pay
for
college,
be
smart
about
it.
For
example,
think
twice
before
borrowing
from
your
401(k).
Such
a
move
will
slow
the
growth
potential
of
your
retirement
funds
and
it
could
prove
costly
in
other
ways,
too.
For
one
thing,
if
you
leave
your
job,
voluntarily
or
involuntarily,
you’ll
need
to
repay
your
401(k)
loan
completely,
usually
within
60
days.
If
you
can’t,
the
balance
will
be
considered
a
taxable
distribution–and
you
may
even
have
to
pay
a
10
percent
penalty
on
it.
Instead
of
tapping
into
your
401(k),
IRA
or
other
accounts
you’ve
designated
for
retirement,
look
for
other
ways
to
help
build
your
children’s
college
funds.
You
might
decide
to
open
a
Section
529
plan,
which
offers
tax‑free
earnings
potential,
provided
the
money
is
used
to
pay
for
higher
education
costs.
You
can
put
whatever
you
can
afford
into
a
Section
529
plan,
along
with
gifts
from
grandparents
or
other
relatives.
Contributions
are
tax‑deductible
in
certain
states
for
residents
who
participate
in
their
own
state’s
plan.
Please
note
that
a
529
College
Savings
Plan
could
reduce
a
beneficiary’s
ability
to
qualify
for
financial
aid.
You
might
also
want
to
consider
a
Coverdell
Education
Savings
Account,
which
offers
another
tax‑advantaged
way
to
save
for
college.
