Don’t Sacrifice Your Future

Don’t sacrifice your future: retirement vs children’s education

Every parent, at some point, has made a decision to put their children’s needs ahead of their own. Starting from the moment your child becomes a part of your family, you’re putting aside your need for sleep, to feed and comfort your tiny bundle of joy…Every. Two. Hours.

And, this continues throughout parenthood with decisions to miss that once-in-a lifetime concert because your little one has a fever or to buy the minivan over the sweet two-seater you’ve absolutely fallen in love with. We make these “sacrifices” without regret because we love our children unconditionally.

There is one decision, however, where your children’s needs should not supersede your own…that’s the decision between saving for your retirement or saving for your children’s education. For many the decision normally comes down to which one to save for, not how much to save for both. When you’re pressed with making a choice between the two – your children’s future or your own future – placing yourself first will give your family a long-term benefit.

In a 2016 Parents, Kids and Money survey conducted by T. Rowe Price, more respondents had saved for their children’s college than saving for their own retirement. And, in this same study 16 percent of those questioned indicated they used their retirement savings to pay for their children’s education.

The arguments we make with ourselves on why we should put our children’s needs ahead of our own are plenty. We want to give our children a chance at a great life and higher education is an excellent way to make that happen. And while, practically speaking, college is more imminent than retirement, in this case, putting your needs ahead of your children’s is the way to go.

You’ve probably heard, “you can’t borrow for your retirement” and the saying holds true. Your children can apply for scholarships, loans or possibly grants, depending on your situation. They can work, go to an in-state school or community college as they save the money needed for another college of their choice. You will have fewer options in retirement. In a Bankrate Financial Literacy Poll, 75 percent of the people said they would probably work after the typical retirement age, one-third said they would work because they were not saving enough for retirement. The reality is only 15 percent of retirees are actually working in retirement, and that low statistic may be because of health concerns or lack of opportunities, rather than a choice for the leisurely life.

Another good reason to prioritize your retirement savings is the benefit of an employer sponsored retirement plan. If you work for a company providing a 401k benefit with a company matching contribution, you don’t want to leave that free money on the table.

It’s counterintuitive for many parents to place their needs ahead of their children’s needs; however, in this case making the choice to save for retirement will benefit the family overall. And, really, by saving for your retirement over saving for your children’s college, you’re doing them a favor. Just let them know the alternative is that you’ll live with them…FOREVER.

Shannon Duncan

Shannon Duncan, a registered financial advisor, has spent more than 20 years in the retirement plan industry helping participants understand the importance of saving for their future.

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