It takes a lot of savings to build a comfortable retirement, and it takes a lot of money to finance your kids' college education. So which should be higher on your priority list?
"Saving should be a priority as soon as possible because the decisions you make now will have a significant impact on how much money you have when your children are ready to head off to college and when you are ready to enjoy your retirement," said Dean Urbanski, National Director of Financial Advisory Services at BMO Harris Financial Advisors. "Set a goal to build a plan that allows you to save for both, and the sooner you start, the better able you'll be to provide for both eventualities."
Here are some tips on finding the delicate balance between retirement and education:
• It all starts with having a specific, strong financial plan that builds toward all your financial goals. Work with a financialadviser to help you find the best plan for you.
• Include paying off your own student loans in your plan. Of course how you prioritize eliminating debt all depends on the interest rate of the loan, the balance and the repayment terms. Generally, the higher the interest rate, the sooner you would like to pay it off, particularly if you can't deduct the interest.
• If you are concerned you'll have to choose between retirement and college, talk to a financial adviser first. Having a well-developed plan may help keep you from having to make a choice between retirement and education.
"Having a specific plan that you can stick to is extremely important," said Urbanski. "Work with a financial advisor to help you find the right tools and develop a plan to provide for retirement and to accommodate the rising costs of college education."